Taipei--Shares in Taiwan staged a technical rebound Thursday as the bellwether electronics sector attracted bargain hunters after a slump in the previous session, dealers said.
Select suppliers to Apple Inc., such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and iPhone and iPad assembler Hon Hai Precision Industry Co. (??), posted more visible gains ahead of the expected launch in September of the next generation iPhones, dealers said.
Despite the gains on the index, turnover failed to expand as many investors waited for the monthly revenue reports by listed companies, which are expected by June 10, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 46.70 points, or 0.47 percent, at 10,087.42, after moving between 10,059.93 and 10,100.37. Turnover totaled NT$81.40 billion (US$2.71 billion) during the session.
The market opened up 0.24 percent and moved higher as the weighted index bounced back from a 0.61 percent decline on Wednesday and briefly breached 10,100 points mark on the strength of the high-tech sector, dealers said.
The upturn was boosted by bargain hunting, although the index faced some technical selling that compromised the gains to some extent at the end of the session, with old economy and financial stocks remaining in the doldrums, they said.
"Yesterday's drop largely reflected selling by foreign institutional investors, who were closely following the latest cut in Taiwan's weighting in MSCI indexes, which became effective after the market closed," Mega International Investment Services Corp. analyst Alex Huang said.
In mid-May, MSCI Inc., a global index provider, cut Taiwan's weighting on two of its indexes, including the MSCI Emerging Markets Index from 12.09 percent to 12.04 percent.
"That factor disappeared today," Huang said. "The local equity market rebounded but remained in a narrow range throughout the session."
Huang said that the electronics sector, rising 1.02 percent, drove the gains on the broader market, after the local media reported earlier in the day that Hon Hai Chairman Terry Gou (???) was at its Shenzhen plant to supervise the mass production of the new iPhones, which are expected to hit the market in September.
Hon Hai, which gains about 40 percent of its sales from Apple, climbed 1.46 percent to close at NT$104.50, while TSMC, which reportedly is supplying the A11 processor for the new iPhones, rose 1.97 percent to NT$207.00. TSMC and Hon Hai are the two largest stocks in Taiwan in terms of market capitalization.
Catcher Technology Co. (??), a metal casing supplier to Apple, added 0.63 percent to close at NT$320.00, while Largan Precision Co. (???), a smartphone camera maker for iPhones, fell 0.74 percent to end at NT$4,715.00 but remained the most expensive stock on the local market.
"Market attention was drawn to the electronics sector, which absorbed the majority of funds, while the old economy and financial sectors appeared slow, limiting the gains on the broader market," Huang said.
In the non-high tech sector, food brand Uni-President Enterprises Corp. (??) fell 0.83 percent to close at NT$59.60, and Formosa Chemicals & Fibre Corp. (??) lost 0.77 percent to end at NT$90.60, while Chang Hwa Commercial Bank (??) dropped 0.85 percent to close at NT$17.40.
"Until the listed companies report their May revenue, the weighted index is expected to remain in consolidation after the slow season last month for many electronics firms, and most investors are not anticipating any surprises," Huang said.
Source: Focus Taiwan News Channel