Shares in Taiwan recovered earlier losses Monday after select suppliers in the Apple Inc. supply chain staged a rebound, pushing up the broader market into positive territory by the end of the session, dealers said.
Turnover remained thin, with many investors staying on the sidelines, reluctant to chase prices during the ongoing earnings season at home and on Wall Street, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 11.05 points, or 0.12 percent, at 9,176.22, after moving between 9,074.99 and 9,182.67, on turnover of NT$60.86 billion (US$1.91 billion).
The market opened down 0.16 percent and fell to the day's low below the 9,100-point mark on follow-though selling from a session earlier, with downward pressure focusing on major high-tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, the dealers said.
However, bargain hunters then turned active, rushing to pick up Apple concept stocks, in particular smartphone camera lens supplier Largan Precision Co. (???) and Hon Hai Precision Industry Co. (??) -- an assembler of iPhones and iPads -- as well as some major old-economy stocks, to vault the weighted index back into the black, they said.
"It seems that the broader market got strong technical support at around 9,100 points, so that the index staged a rebound from the day's low," Concord Securities analyst Kerry Huang said, referring to the buying in select Apple suppliers.
A research note released by a U.S. brokerage showed that shipments of iPhones for the fourth quarter is expected to hit 74 million units, up 2 million units from a previous market estimate, which prompted investors here to raise their holdings in some of the major Apple suppliers such as Largan and Hon Hai, the dealers said.
"The rising demand for iPhones came after Samsung Electronics Co. decided to suspend production of its latest flagship, the Galaxy Note 7, which has been rocked by a spate of explosions" due to overheating batteries, Huang said. "High hopes about the new iPhone sales gave a boost to Taiwan's equity market today," he added.
Among the major Apple concept stocks, Largan rose 0.82 percent to close at NT$3,695.00, off an early low of 3,630.00, and Hon Hai, the world's largest contract electronics maker, gained 0.86 percent to end at NT$81.90 after hitting a low of NT$80.40.
TSMC, the world's largest contact chip maker, which is believed to make the A10 processor for the new iPhone models, moved below the previous closing level throughout the session, falling 0.80 percent to close at NT$186.50, as investors continued to lock in their gains built for the stock in recent sessions.
Bargain hunting also spread to some old-economy stocks, Huang said. Among them, Formosa Plastics Corp. (??) gained 0.38 percent to close at NT$80.00, off an early low of NT$78.20, while Formosa Chemicals & Fibre Corp. (??) ended unchanged at NT$87.70 after recovering from a low of NT$85.90.
"Despite the rebound, trading volume remained low, pointing to cautious market sentiment for the moment," Huang said. "Investors were simply waiting for earnings reports from heavyweights at home and in the U.S. market for more clues about global demand."
Huang said that investors should remain alert over upcoming earnings reports by Intel and Microsoft, expected later in the week.
Source: Focus Taiwan News Channel