Taiwan shares recoup earlier losses on late session buying
Shares in Taiwan recovered earlier losses to close in positive territory Thursday due to late-session buying in select large-cap stocks, in particular in the bellwether electronics sector, dealers said.
Trading throughout the session was confined to a narrow range and turnover remained low, as market sentiment turned cautious, with investors wary of stiff technical resistance ahead of the 9,300-point psychological level, the dealers said.
Renewed concern over a possible interest rate hike by the U.S. Federal Reserve also kept many investors on the sidelines, which also prevented the index from making a breakthrough in the session, they added.
The weighted index on the Taiwan Stock Exchange closed up 12.03 points, or 0.13 percent, at the day's high of 9,284.31, off an early low of 9,242.83, on turnover of NT$61.72 billion (US$1.97 billion).
The market opened down 8.88 points on follow-through selling from a session earlier and moved to the day's low, keeping the index below the previous closing level during most of the session, as investors ignored gains posted on Wall Street overnight, the dealers said.
However, buying emerged in the late trading session to vault the broader market into the black, focusing on certain market heavyweights, such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple Inc., they said.
"Despite the upturn on Wall Street, many investors here were not convinced to raise their holdings amid fears that the U.S. market could face a correction due to its current high valuation," Hua Nan Securities analyst Kevin Su said. Boosted by a spike in crude oil prices, the Dow Jones Industrial Average closed up 112.58 points or 0.62 percent Wednesday.
"In Taiwan, the stiff technical resistance ahead of 9,300 points affected investors' confidence, so the local main board remained in consolidation mode today," Su said.
Fortunately, Su said, TSMC, the most heavily weighted stock in the local market, served as an anchor that stabilized the broader market, and lifted the electronics sub-index, as well as the weighted index, by the end of the session.
TSMC rose 0.81 percent to close at NT$187.50, off an early low of NT$185.00, with 15.46 million shares changing hands, while Hon Hai, the world's largest contract electronics maker, gained 0.75 percent to end at NT$80.20, recovering from a low of NT$80.00.
Led by TSMC, the electronics sub-index closed up 0.20 percent, with the semiconductor sub-index up 0.54 percent.
HTC Corp. (???), a smartphone brand, soared 3.13 percent to close at NT$89.10 on hopes that the company would report an improvement in its revenue after the close of trading.
In the non-high-tech sector, which closed mixed, food maker Uni-President Enterprises Corp. (??) fell 1.46 percent to end at NT$60.90, while Formosa Plastics Corp. (??) rose 0.76 percent to close at NT$79.10. Meanwhile, Fubon Financial Holding Co. (???) shed 0.97 percent to end at NT$45.85.
"It seemed that worries over a rate hike by the Fed are running deeper after several officials at the U.S. central bank voiced support for the tightening of the monetary policy earlier in the week," Su said. "It was no surprise that trading volume remained thin with trading interest fading."
Source: Focus Taiwan News Channel