Taipei, Shares in Taiwan closed higher Wednesday, as the bellwether electronics sector led a recovery of the broader market from early losses, amid lingering concerns over the COVID-19 coronavirus pandemic, dealers said.
An apparent intervention of government-led funds also helped to boost the main board, but turnover remained moderate as many investors stayed on the sidelines, waiting to see how the reopening of many economies worldwide will progress after weeks of shutdown due to the coronavirus, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) ended up 58.80 points, or 0.54 percent, at the day’s high of 10,938.27, after coming off a low of 10,828.93. Turnover totaled NT$160.9 billion (US$5.38 billion) during the session.
The market opened down 0.17 percent and soon moved to the day’s low, as investors remained cautious due to reports of a resurgence of COVID-19 cases in some Asian countries, including China and South Korea, which were poised to reopen for business, dealers said.
As the Taiex moving closer to 10,800 points at around 10 a.m., however, bargain hunting emerged, targeting large-cap tech stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which helped vault the broader market back into positive territory, they said.
“I think the buying came largely from government-led funds in a bid to boost investor confidence, as foreign institutional investors remained on the sell side,” Hua Nan Securities analyst Kevin Su said.
According to Taiex data, foreign institutional investors sold a net NT$4.76 billion worth of shares on the main board Wednesday, after a net sell of NT$25.09 billion Tuesday.
“Today’s buying focused on tech heavyweights, which was an easy way for certain investors to help pull the Taiex out of the doldrums,” Su said.
TSMC, the most heavily weighted stock on the local market, rose 0.68 percent to close at the day’s high of NT$297.00, off a low of NT$292.50.
Led by TSMC, the electronics sector ended up 0.79 percent at 486.38 points, after dropping to a low of NT$480.46.
Among the other tech stocks that pulled out of early losses, iPhone assembler Hon Hai Precision Industry Co. rose 1.94 percent to close at the day’s high of NT$78.80, and smartphone camera lens supplier Largan Precision Co. ended up 2.07 percent at the day’s high of NT$4,195.00.
Su said buying also spread to select large-cap old economy stocks, with food brand Uni-President Enterprises Corp. gaining 1.44 percent to close at NT$70.40, and Formosa Petrochemical Corp. rising 1.27 percent to end at NT$87.60.
“Many foreign institutional investors seemed cautious about the global financial markets amid worry over a second wave of COVID-19 infections as several countries are reopening for business,” Su said. “So, I do not expect tech heavyweights or the Taiex to make a significant breakthrough soon.”
Some so-called anti-epidemic concept stocks saw strong buying on Wednesday, including face mask maker Universal Inc. and pharmaceutical manufacturer Chunghwa Chemical Synthesis & Biotech Co, which both rose by the daily maximum 10 percent to close at NT$104.00 and NT$69.00, respectively.
Source: Focus Taiwan News Channel