Shares in Taiwan closed slightly higher Friday after moving in consolidation mode amid lingering concerns over a possible interest rate hike by the U.S. Federal Reserve, which would lead to more foreign funds flowing out of the region, dealers said.
Expectations of a rate hike by the Fed were heightened by comments by Fed Chair Janet Yellen, who said at a congressional hearing on Thursday U.S. time that a move to raise interest rates could be "appropriate relatively soon."
Select large-cap stocks in the bellwether electronics sector got a boost late in the trading session, helping the broader market close slightly above the 9,000-point mark, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed up 13.53 points, or 0.15 percent, at 9,008.79, after moving between 8,958.22 and 9,025.98 on turnover of NT$68.43 billion (US$2.14 billion).
The market opened down 3.76 points and fell to the day's low within the first hour of trading as interest rate hike worries haunted market sentiment.
But the index then edged slightly higher while remaining in a fairly narrow range, helped by bargain hunters who picked up certain heavyweights, dealers said.
"Yellen's comments made many investors wary of an immediate rate hike, and investors at home and in the region were afraid that foreign investors will move more funds out of the region and into U.S. dollar denominated assets," KGI Securities analyst Phil Chu said.
Data released by the Financial Supervisory Commission showed that during the Nov. 1-15 period, foreign institutional investors sent a net US$1.799 billion out of the country, almost as much as the net US$1.916 billion they remitted out of the country in all of October.
"Many investors here preferred to stay on the sidelines for the time being, waiting for the conclusion of the Fed's next policymaking meeting (scheduled for Dec. 13-14)," Chu said.
"It was no surprise that turnover stayed low, which made any breakthrough in the index unlikely."
After Yellen's testimony, there is a 91 percent likelihood of a rate hike in December, according to U.S-based futures and options trading firm CME Group Inc.
Chu said Taiwan's market was still able to finish higher Friday because select high-tech stocks attracted some bargain hunting.
Among the gaining electronics stocks, Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., rose 4.32 percent to close at NT$3,500.00 to remain the most expensive stock in the local market.
Investors were hoping that Apple will adopt dual camera lenses in both of the next two new iPhone models to be released next year. Apple used dual camera lenses only in the iPhone 7 Plus but not in the smaller iPhone 7 this year.
Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, added 0.37 percent to end at NT$80.90 on follow-through buying from a session earlier.
Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock here, fell 0.28 percent to close at NT$181.00, with 22.47 million shares changing hands.
In the old economy sector, textile maker Far Eastern New Century Corp. (???) rose 0.88 percent to close at NT$22.85, while China Steel Corp. (??), Taiwan's largest steel supplier, fell 1.03 percent to end at NT$24.05, and food firm Uni-President Enterprises Corp. (??) lost 1.09 percent to close at NT$54.60.
"Although the index closed above 9,000 points today, the market remained technically weak. So the index could test that level again if foreign institutional investors further cut their holdings," Chu said.
According to the TWSE, foreign institutional investors sold a net NT$6.13 billion in shares on the exchange Friday.
Source: Focus Taiwan News Channel