Taipei-Shares in Taiwan bounced back Tuesday from a slump in the previous session, breaking the 11,500 point level, as bargain hunters rushed to pick up battered tech heavyweights, dealers said.
However, turnover remained moderate as many investors preferred to stay on the sidelines throughout the session amid lingering concerns over the trade disputes between the United States and China before a formal deal is signed, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) closed up 93.09 points, or 0.81 percent, at the day's high of 11,520.37, after coming off a low of 11,459.68. Turnover totaled NT$118.18 billion (US$3.89 billion) during the session, after reaching NT$153.91 billion the previous day.
The market opened up 0.32 percent in a mild technical rebound from Monday, when the Taiex plunged 1.31 percent. Buying accelerated throughout the session, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), iPhone assembler Hon Hai Precision Industry Co. and other large-cap tech stocks helping to push the broader market past 11,500 points, dealers said.
"Yesterday's losses partly reflected fears over a possible retreat by foreign institutional investors, but they stood on the buy side despite the index's plunge," Concord Securities analyst Kerry Huang said. "The foreign institutional buying yesterday prompted bargain hunters to return to the trading floor today, which resulted in the Taiex recovering more than half of yesterday's losses."
According to Taiex data, foreign institutional investors bought a net NT$3.84 billion worth of shares Monday and registered a net buy of NT$4.69 billion Tuesday.
"The buying focused on tech heavyweights Tuesday, in particular those that had been dumped a day earlier, including TSMC and Hon Hai," Huang said. "With such interest in those large-cap stocks, the bellwether electronics sector accounted for about 70 percent of the total turnover."
TSMC, the most heavily weighted stock on the local market, gained 1.33 percent to close at the day's high of NT$305.00, with 17.50 million shares changing hands, after falling 1.47 percent the day before.
TSMC's gains contributed about a 40 point increase in the Taiex and pushed up the electronics sector and the semiconductor sub-index by 1.24 percent and 1.37 percent, respectively.
Also in the tech sector, Hon Hai, the second largest stock in terms of market capitalization, rebounded by 3.53 percent from a 3.30 percent dive a session earlier to end at NT$91.00.
Among other tech stocks, integrated circuit designer MediaTek Inc. rose 1.61 percent to close at NT$410.00, and memory chip maker Nanya Technology Co. added 1.12 percent to end at NT$72.00, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., extended its losses from the previous day to finish 1.41 percent lower at NT$4,540.00.
Old economy and financial stocks, meanwhile, showed mixed a performance that included relatively insignificant gains.
Among them, food brand Uni-President Enterprises Corp. rose 0.27 percent to close at NT$73.40, Wei Chuan Foods Corp. fell 0.20 percent to end at NT$25.15, Formosa Chemicals and Fibre Corp. gained 0.23 percent to close at NT$87.80, and Formosa Plastics Corp. lost 0.10 percent to finish at NT$96.90.
In the financial sector, which closed up 0.55 percent, Cathay Financial Holding Co. rose 1.30 percent to end at NT$42.80, and Fubon Financial Holding Co. added 0.77 percent to close at NT$45.55, while E. Sun Financial Holding Co. dropped 0.18 percent to end at NT$27.25.
With Tuesday's gains, the Taiex cleared the technical resistance ahead of the 10-day moving average of around 11,510 points, which made the main board technically healthier, according to Huang.
"However, the global trade disputes remain an issue in the equity market," Huang said. "As long as no formal deal is signed, sentiment is expected to be plagued by uncertainty."
Source: Focus Taiwan News Channel