Shares in Taiwan closed higher on Monday as the bellwether electronics sector trended higher, led by large cap high-tech stocks such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???). These helped the broader market offset selling in the old economy and financial sectors, dealers said.
Despite the upturn, turnover remained thin as many investors remained on the sidelines, waiting for the release of more corporate results during the on-going earnings seasons at home and on Wall Street, they said.
The weighted index on the Taiwan Stock Exchange ended the day up 15.93 points, or 0.17 percent, at 9,322.50, after moving between 9,308.53 and 9,343.57, on turnover of NT$56.76 billion (US$1.79 billion).
The market opened up 0.29 percent as TSMC, the most heavily weighted stock on the market, posted gains, and momentum continued until the end of the session with the chip maker and other high-tech heavyweights, including smartphone camera lens supplier Largan Precision Co. (???) moving higher, dealers said.
"As long as the weighted index moves above the 9,300 point mark, the local main board remains technically sound at a time when foreign institutional investors still own a large chunk of long position futures contracts," KGI Securities analyst Phil Chu said.
According to Chu, foreign institutional investors hold about 86,000 more long position contracts than short position ones on the local futures market.
"So, while the market is in consolidation mode, an uptrend at a slow pace remains feasible." Chu said that the slow pace in moving higher reflected low turnover during the current earnings season at home and abroad.
"Investors are watching closely how Apple Inc., which has a number of suppliers in Taiwan, will report its earnings later in the week," Chu aid. "In addition, a stronger Taiwan dollar in the third quarter has raised concerns that export-oriented high tech firms will report foreign exchange losses in the quarter."
Fortunately, Chu said, TSMC, the world's largest contract chip maker, closed higher to keep the weighted index in positive territory amid optimism about the firm's lead over its peers in high-end technology processes, such as the 10 nanometer and 7nm processes.
Shares in TSMC gained 1.33 percent to close at a high of NT$191.00 with 13.45 million shares changing hands. Led by TSMC, the electronics sub-index closed up 0.56 percent and the semiconductor sub-index up 1.05 percent.
Among other gaining high-tech stocks, Largan, the most expensive stock in Taiwan, rose 1.62 percent to close at NT$3,770.00, and flat panel maker AU Optronics Corp. (??) added 2.81 percent to end at NT$12.80.
Bucking the upturn on the broader market, Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple, fell 0.12 percent to close at NT$84.20.
In the old economy sector, shares in Formosa Plastics Corp. (??) lost 0.71 percent to end at NT$84.10 and textile maker Far Eastern New Century Corp. (???) fell 0.82 percent to close at NT$24.30, while Mega Financial Holding Co. (???) shed 0.91 percent to end the day at NT$21.80.
"The current low turnover is also caused by uncertainty over the U.S. presidential election (scheduled for Nov. 8). I think slow sessions with no clear direction will continue until then," Chu said.
Source: Focus Taiwan News Channel