Taipei-- Shares in Taiwan closed slightly higher on Friday amid cautious sentiment, with many investors choosing to remain on the sidelines ahead of the inauguration of U.S. President-elect Donald Trump later in the day, dealers said.
Shares in select large cap stocks in the Apple Inc. supply chain, in particular smartphone camera lens supplier Largan Precision Co. (???), staged a technical rebound from a slump in the previous session, lending support to the broader market throughout the day, they said.
The weighted index on the Taiwan Stock Exchange closed up 13.34 points, or 0.14 percent, at 9,331.46, after moving between 9,317.62 and 9,350.07, on turnover of NT$66.93 billion (US$2.12 billion).
The market opened up 8.68 points as shares bounced back from a 0.26 percent fall on Thursday and fluctuated in a narrow range throughout the session, although the weighted index was above the previous closing level for most of the day and ended higher, dealers said.
"Look at Wall Street overnight. I think the global financial markets are watching closely what Trump is going to say in his inauguration speech," Mega International Investment Services Corp. analyst Alex Huang said. "More important, global markets have turned cautious about what economic policies Trump will lay out in the first 100 days after he is sworn in."
Overnight, the Dow Jones Industrial Average posted a fifth consecutive losing session, down 0.37 percent, while some economic data beat earlier estimates, including housing starts, which soared 11.3 percent in December.
"Taiwan can not isolate itself from the global markets. It was no surprise that we had another boring day today," Huang said. "Local investors simply want to know how Wall Street will react after Trump's speech and then map out their investment strategies."
The silver lining was that select high-tech stocks trended higher, lifting the broader market, Huang said.
"In particular Largan's gains contributed to the upturn since many investors remain optimistic about its fundamentals," Huang said.
Shares in Largan, the most expensive stock on the local market, rose 2.21 percent to close at NT$4,390.00 after a 3.37 percent fall on Thursday. An Asia-based brokerage has forecast that Largan's earnings per share for 2017 and 2018 will hit NT$248.67 and NT$297.07, respectively, up from NT$169.40 in 2016.
Catcher Technology Co. (??), a metal casing supplier to Apple, gained 4.30 percent to end at NT$242.50 and shares in Taiwan Semiconductor Manufacturing Co. (???), which is believed to make the A10 processor for the latest iPhones, gained 0.28 percent to close at NT$181.00. Against the upturn, shares in Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, fell 0.12 percent to end at NT$83.40.
In the non-high tech sector, Cathay Financial Holding Co. (???) rose 0.64 percent to close at NT$47.15 and Fubon Financial Holding Co. (???) gained 0.60 percent to end at NT$50.50. Meanwhile, Formosa Plastics Corp. (??), added 0.57 percent to close at NT$88.50.
"I expect the weighted index will face strong technical resistance as it moves closer to 9,350 points, so there is limited room for local shares to go higher and it is time for investors to lower their holdings," Huang said.
However, in the event of any correction, the local weighted index is likely to see technical support around 9,150-9,200 points in the near future, Huang added.
According to the TWSE, foreign institutional investors bought a net NT$2.51 billion worth of shares on the main board on Friday.
Source: Focus Taiwan News Channel