Taipei--Shares in Taiwan closed higher Monday, as buying in the latter part of the trading session boosted select large-cap stocks in both the electronics and non-high-tech sectors, helping the broader market recover from earlier losses, dealers said.
The upturn, however, was capped amid lingering caution during the ongoing earnings season on Wall Street, which could affect the U.S. market and in turn influence other markets, including Taiwan, the dealers said.
The weighted index on the Taiwan Stock Exchange ended up 24.58 points, or 0.24 percent, at the day's high of 10,461.28, off an early low of 10,406.81, on turnover of NT$81.47 billion (US$2.68 billion).
The market opened down 0.10 percent in the wake of a weaker Wall Street, where the Dow Jones Industrial Average fell 0.1 percent as a result of a fall in energy prices on Friday, the dealers said.
The local weighted index continued in a narrow range and kept moving below the previous closing level for most of the trading session as market heavyweights remained in the doldrums, they said.
Buying emerged in late-session trading, with investors rushing to pick up stocks including contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and iPhone assembler Hon Hai Precision Industry Co. (??) to vault the broader market into positive territory, the dealers added.
"Judging from the late-session buying in large-cap stocks, I think foreign institutional investors served as the major buyers, although the volume was limited at a time when many of them remained away from the trading floor due to their summer vacations," MasterLink Securities analyst Tom Tang said.
According to the TWSE, foreign institutional investors bought a net NT$1.33 billion (US$43.75 million)-worth of shares on the main board on Monday.
"Foreign institutional investors still own a large chunk of long position contracts in the futures market, so they simply boosted the spot market to profit in futures," Tang said, adding that foreign institutional investors held about 39,000 more long position contracts than short position contracts as of Friday.
TSMC, the most heavily weighted stock in the local market, rose 0.23 percent to close at NT$214.50, off an early low of NT$213.00, with 19.97 million shares changing hands, while Hon Hai, the second- largest stock in terms of market capitalization, gained 0.87 percent to end at NT$116.00 after hitting a low of NT$114.00, on trading volume of 28.71 million.
Both TSMC and Hon Hai are two of the most important suppliers to Apple Inc. and the buying reflected the optimism toward the launch of the next-generation iPhones, likely in September, Tang said.
"The upbeat mood also boosted other Apple concept stocks today," Tang said. Among them, metal casing maker Catcher Technology Co. (??) rose 2.64 percent to close at NT$369.00, and smartphone camera lens producer Largan Precision Co. (???) added 1.11 percent to end at NT$5,485.00.
Tang said that on the back of foreign institutional buying in the late trading session, some of large-cap stocks in the old economy and financial sectors moved higher, giving an additional boost to the weighted index.
Among the gaining old economy stocks, food brand Uni-President Enterprises Corp. (??) gained 1.00 percent to close at NT$60.60, Formosa Plastics Corp. (??) rose 0.55 percent to end at NT$92.00, and Nan Ya Plastics Corp. (??) added 0.40 percent to close at NT$75.10.
In the financial sector, Mega Financial Holding Co. (??) rose 1.38 percent to end at NT$25.70.
"Despite today's gains, turnover remained moderate, as cautious sentiment still dominated the local bourse, with many investors here watching closely to see how high-tech stocks on Wall Street, including Apple, will report their earnings," Tang said.
Tang said that the weighted index is expected to move between 10,400 and 10,600 in the short term.
Source: Focus Taiwan News Channel