Taipei--Shares in Taiwan closed slightly higher after moving in a narrow range ahead of the nearest stiff technical resistance level at around the 10,500-point mark, dealers said.
While the bellwether electronics sector remained in consolidation mode, ample liquidity prompted investors to park their funds in select old economy stocks, in particular in the cement, petrochemical and steel sectors, which lent support to the broader market, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 13.63 points, or 0.13 percent, at 10,457.54, after fluctuating between 10,436.31 and 10,490.05, on turnover of NT$98.94 billion (US$3.25 billion).
The market opened up 0.22 percent and rose to the day's high in the wake of another record high on Wall Street, where the Dow Jones Industrial Average rose 0.39 percent and the S and P 500 index gained 0.47 percent on Friday upon hopes of an improvement in corporate earnings, the dealers said.
With the local weighted index moving closer to the 10,500-point level in the early morning session, some selling emerged, focusing on large-cap high-tech stocks, which pushed down the broader market into negative territory before bargain hunters turned active, helping the main board return to the black by the end of the session, they said.
"Many electronics heavyweights such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and iPhone assembler Hon Hai Precision Industry Co. (??) remained in the doldrums," KGI Securities analyst Phil Chu said.
"Without a strong electronics sector, it was no surprise that the broader market was still in consolidation mode due to the lack of a mainstream sector to lead the weighted index," Chu said.
The bellwether electronics sector closed up only 0.03 percent, with TSMC, which is believed to supply the A11 processor for the new iPhone, unchanged at NT$213.00, off an early high of NT$215.50, and Hon Hai, which could serve as the assembler of the new larger iPhones, flat at NT$115.50 after hitting an intraday high of NT$116.00.
"The two stocks were affected by fears of a delay in the launch of the next-generation iPhones due to lower-than-expected yield rates, which could slow the pace of replacement waves," Chu said.
Media reports have said that iPhone assemblers are struggling to improve their yield rates for the new model production, so that full commercial production could be delayed for one or two months.
Among other Taiwanese suppliers to Apple Inc., Pegatron Corp. (??), an assembler of smaller iPhones, fell 0.30 percent to close at NT$98.50, while Largan Precision Co. (???), a smartphone camera lens maker, rose 0.77 percent to end at NT$5,210.00.
"At a time of a lower electronics sector, investors with high liquidity tended to set their sights on some old economy stocks due to their relatively low valuations," Chu said.
In the old economy sector, Nan Ya Plastics Corp. (??) rose 0.65 percent to close at NT$77.80, China Steel Corp. (??), the largest steel maker in Taiwan, added 0.78 percent to end at NT$25.80, and Asia Cement Corp. (??) gained 3.04 percent to close at NT$27.10.
"Although Wall Street still smashed its records repeatedly, the gains seemed to be limited, which made investors here cautious about a possible pullback, so that it will be difficult for the local weighted index to move significantly higher for the moment," Chu said.
Source: Focus Taiwan News Channel