Shares in Taiwan staged a mild technical rebound on Wednesday after falling for four of the past five trading sessions, with the market's weighted index briefly rising back above the 9,000-point mark, dealers said.
Yet despite the small swing upward, investors here remained cautious about possible further selling by foreign institutional investors, which kept them from chasing prices more than they did, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 31.19 points, or 0.35 percent, at 8,962.22, after moving between 8,955.76 and 9,032.31, on turnover of NT$76.87 billion (US$2.42 billion).
The market opened 0.28 percent higher and buying continued to push the index to the day's high as investors reacted to gains on Wall Street, where the Dow Jones Industrial Average ended higher for the seventh consecutive session overnight and the tech-heavy Nasdaq index gained 0.75 percent, dealers said.
Buying in Taiwan focused on large-cap high-tech stocks because of tech's strength in the U.S., but once the index breached the 9,000-point mark, selling set in to pull the market off the day's high at the close, they said.
"The strength of today's rebound was not significant enough to help the market make a strong comeback after the latest losses caused by massive foreign institutional selling," Mega International Investment Services Corp. analyst Alex Huang said.
According to the TWSE, foreign institutional investors sold a net NT$8.03 billion in shares on the exchange Wednesday.
Since Nov. 10, the first trading session in Taiwan after Donald Trump was elected president, foreign institutional investors have been net sellers of NT$59.8 billion in shares.
"It seemed that foreign institutional investors cut their holdings in the market and remitted their funds out of the country, betting on a stronger U.S. dollar," Huang said.
"Under such unfavorable circumstances, many investors were unwilling to chase prices for the time being amid fears of a further fund exodus."
The bellwether electronics index closed up 0.41 percent at 359.79, off an early high of 363.27, as investors pocketed their early gains.
In the high-tech sector, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, closed unchanged at NT$180.00, off an early high of NT$183.00, with 34.83 million shares changing hands.
Also in the sector, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 1.80 percent to end at NT$3,385.00 after hitting the day's high of NT$3,415.00, while Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, closed unchanged at NT$79.00, off an early high of NT$79.90.
In the non-high tech sector, Taiwan Cement Corp. (??) fell 0.41 percent to close at NT$36.55, off an early high of NT$37.25, while Formosa Plastics Corp. (??) gained 0.59 percent to end at NT$85.50. after hitting a high of NT$86.00.
Fubon Financial Holding Co. (???) closed up 0.21 percent at NT$47.60, off an early high of NT$48.45.
"Caution remains toward U.S. policy after Trump takes office. How the U.S. economy, the largest one in the world, will go is expected to affect global markets, including Taiwan's," Huang said. "It was no surprise that today's turnover here was low."
Source: Focus Taiwan News Channel