Taipei, Shares in Taiwan continued their momentum from the previous session as they moved closer to the 11,000 point mark Tuesday, with select electronic component makers and optoelectronics stocks posting strong gains, particularly in the late trading session, dealers said.
Large cap stocks in the old economy sector, including steel and petrochemical firms, also trended higher, giving an additional boost to the broader market, while electronics heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) remained in the doldrums, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 48.50 points, or 0.44 percent, at 10,995.39 after moving between 10,917.61 and 10,995.39, on turnover of NT$143.90 billion (US$4.69 billion).
The market opened down 0.08 percent and soon fell to the day's low on a mild technical correction, but in the late morning session, buying emerged with select high tech stocks in focus, dealers said.
Momentum continued and became clearer as investors turned to certain old economy stocks, pushing the Taiex up further and ensuring the index closed less than five points under the 11,000 point mark, they said.
"Passive electronics component makers such as Yageo Corp. benefited from rising product prices," Concord Securities analyst Kerry Huang said. "After consolidating for some time, these stocks regained their footing today." Passive components refer to products such as chip resistors and multi layer ceramic capacitor (MLCC) chips.
Yageo, one of the most expensive stocks in the local market, rose 5.82 percent to close at NT$391.00 with 12.15 million shares changing hands as the company expects an uptrend in product prices will continue into September.
The popularity of Yageo also spread to shares in its rival Walsin Technology Corp., which rose 5.82 percent to end at NT$391.00.
"The two passive component stocks took about NT$20 billion in turnover, indicating retail investors were interested in buying," Huang said. Rebounding from Monday's downturn, smartphone camera lens supplier Largan Precision Co. rose 0.48 percent to close at NT$5,200.00 and rival Genius Electronic Optical Co. gained 2.12 percent to end at NT$482.00.
However, other tech heavyweights appeared sluggish and remained in consolidation mode, Huang said.
Among them, TSMC, the most heavily weighted stock in Taiwan, closed unchanged at NT$241.00 with 27.30 million shares changing hands, and iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, fell 0.35 percent to end the day at NT$85.20.
In the old economy sector, shares in China Steel Corp., the largest steel maker in Taiwan, rose 2.06 percent to close at NT$24.75 and Tung Ho Steel Corp. gained 1.36 percent to end at NT$22.35, while Formosa Plastics Corp. added 0.92 percent to close at NT$109.50, and Formosa Chemicals & Fiber Corp. ended up 1.75 percent at NT$116.00.
"Investors should pay close attention to the current earnings season in the U.S. market, which will move global financial markets," Huang said. "In addition, how the Taiwan dollar moves against the U.S. dollar will decide on fund flows in the local market, another critical factor to equity investors."
According to the TWSE, foreign institutional investors bought a net NT$279 million worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel