Taipei, Shares in Taiwan moved higher Wednesday but came off earlier highs ahead of the 11,100-point psychological level, while the bellwether electronics sector led the broader market, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) at the forefront.
Moderate turnover showed that many investors appeared reluctant to chase prices for the moment when trade friction between the United States and China has escalated, while market sentiment remained cautious during the ongoing earnings season at home, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 91.81 points, or 0.84 percent, at 11,075.25, after moving between 11,026.07 and 11,095.50, on turnover of NT$138.43 billion (US$4.52 billion).
The market opened up 0.39 percent as investors took cues from a higher Wall Street, where the S&P 500 index ended up, just 0.5 percent away from reaching a Jan. 26 all-time high of 2,872.87, the dealers said.
Buying accelerated, with TSMC, the most heavily weighted stock in the local market, staging a significant rebound after a slump in the previous two sessions caused by a computer virus attack on the company that took place last week, the dealers said.
While TSMC's strength continued into the end of the session, some high-priced electronics component stocks came under pressure as investors locked in their earlier gains to compromise the broader market's upturn by the end of the session, they said.
"Despite the gains, the Taiex still failed to breach the 11,100- point mark today," Concord Securities analyst Kerry Huang said. "In fact, after the main board closed above 11,000 (in late July), many investors have feared a possible major pullback."
Huang said buying in TSMC served as a driver to the main board Wednesday as many investors agreed that the virus attack on the world's largest contract chipmaker was an isolated case, although the attack is expected to cut the company's sales for the third quarter by less than 2 percent.
"Many investors have faith that TSMC's delayed shipments caused by the incident will be made up for in the fourth quarter, and they resumed buying in the stock," Huang said.
After falling 2.23 percent in the previous two sessions, TSMC gained 2.48 percent to close at the day's high of NT$247.50, with 24.33 million shares changing hands. Led by TSMC, the bellwether electronics sector closed up 0.90 percent.
Also in the high-tech sector, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 0.90 percent to end at NT$5,060, off an early high of NT$5,125.00, and iPhone assembler Hon Hai Precision Industry Co. added 0.71 percent to end at NT$85.00 after hitting NT$85.10.
Bucking the downturn, firms rolling out passive components such as chip resistors and multi-layer ceramic capacitors (MLCC), came under pressure. Among them, Yageo Corp. fell 5.84 percent to close at NT$742.00, and Walsin Technology Corp. shed 7.56 percent to end at NT$295.00.
Huang said the two passive component stocks generated about NT$26 billion in turnover, or almost 20 percent of the total trading volume, so their losses limit the Taiex gains.
Buying also spread to select non-high-tech stocks in the session, with Yuanta Financial Holding Co. up 4.12 percent to close at NT$15.15 amid optimism toward its securities brokering business, while Eclat Textile Co. soared 8.70 percent to end at NT$375.00 after reporting a 98 percent year-on-year increase in net profit for the second quarter.
"Investors who stayed on the sidelines were watching closely how the Washington-China trade friction will evolve, which could move the global financial markets," Huang said. "In addition, before the current earnings season ends (Aug. 14), turnover could remain moderate."
Source: Focus Taiwan News Channel