Taipei, Shares in Taiwan staged a technical rebound from a session earlier on Tuesday, but the main board remained under the 10,000 point mark at the end of the session, dealers said.
The bellwether electronics sector led the upturn, with buying focusing on contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, while old economy and financial stocks were mixed throughout the session, they said.
Market sentiment remained cautious amid lingering concerns over trade friction between the United States and China and fears over a rate hike by the U.S. Federal Reserve, while investors preferred to stay on the sidelines during the on-going earnings season, they added.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 79.98 points, or 0.81 percent, at 9,981.10, after moving between 9,888.73 and 10,011.19, on turnover of NT$107.22 billion (US$3.47 billion).
The market opened down 9.15 points and soon fell to the day's low on follow-through selling from Monday, as investors followed the lead of a falling Wall Street, where the Dow Jones Industrial Average closed down 0.35 percent and the S and P 500 index ended down 0.59 percent overnight, dealers said.
Bargain hunters emerged in the early morning session, largely rushing to pick up TSMC shares and vault the Taiex over the 10,000 point mark by offsetting the losses suffered by most other stocks. However, further selling followed when the market encountered technical resistance, keeping the upturn under that level at the end of the session, they said.
"The 10,000 point level has become a psychological barrier to many investors after the Taiex fell below that level for the first time since May 2017 last week," Mega International Investment Services Corp. analyst Alex Huang said. "The thin turnover showed many investors are reluctant to chase prices for the moment."
Last week, the local main board fell 4.48 percent followed by a plunge of 1.44 percent on Monday.
"Investor sentiment has become fragile as the market remains bothered by the Washington-Beijing trade disputes," Huang said. He added that the latest interview with U.S. President Donald Trump which aired on CBS on Sunday showed the U.S. administration could impose tariffs on an additional US$267 billion worth of Chinese goods on top of the more than US$200 billion worth affected by tariffs earlier this year.
In the interview, Trump said he told Chinese President Xi Jinping "We cannot continue to have China take US$500 billion a year out of the United States in the form of trade and other things."
"Today's gains were largely boosted by TSMC," Huang said. "As foreign institutional investors remained on the sell side, I think buying largely came from government-led funds seeking to prop up the index."
According to the TWSE, foreign institutional investors sold a net NT$9.60 billion worth of shares on the main board Tuesday after net sales of NT$19.55 billion on Monday.
On Tuesday, TSMC rose 2.82 percent to close at the day's high of NT$237.00 with 37.80 million shares changing hands. TSMC's gains boosted the Taiex by about 65 points, and led the bellwether electronics sector to close up 1.31 percent and the semiconductor sub-index to end up 2.12 percent.
Bucking the upturn on the broader market, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 0.14 percent to end at NT$70.40, and shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., lost 4.31 percent to close at NT$3,330.00.
Old economy stocks closed mixed with Formosa Plastics Corp. up 0.48 percent to close at NT$104.00, but textile maker Far Eastern New Century Corp. fell 3.27 percent ending at NT$31.05.
In the financial sector, which closed up 0.13 percent, shares in Cathay Financial Holding Co. gained 0.80 percent to end at NT$50.40, but CTBC Financial Holding Co. lost 0.24 percent to close at NT$21.15.
"The current earnings season also prompted investors to stay away as they want to see real numbers before jumping into the market," Huang said. TSMC's investor conference set for Thursday is seen as one of the more important meetings to give investors a better idea about the business outlook for the global tech market. Huang said.
Source: Focus Taiwan News Channel