Taipei, Feb. 5 (CNA) Shares in Taiwan extended their momentum Wednesday from a session earlier but gains were capped amid lingering concerns over the coronavirus epidemic, dealers said.
The electronics sector and large cap financial stocks continued to lead the broader market higher, but that was offset by the losses suffered by petrochemical stocks because of a fall in global crude oil prices, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 17.70 points, or 0.15 percent, at 11,573.62, after moving between 11,512.71 and 11,620.42. Turnover was NT$156.96 billion (US$5.2 billion).
"The market has bounced back from the heavy losses seen in the first trading session after the Lunar New Year holiday. It seems the Taiex has entered into consolidation mode," Hua Nan Securities analyst Kevin Su said.
In the first trading session after the holiday on Jan. 30, the Taiex tumbled by more than 5 percent because of fears that the coronavirus epidemic would continue to expand and undermine global economic growth.
Since then, the Taiex had rebounded by 1.17 percent before Wednesday's gains.
"Market sentiment was still dictated by uncertainty posed by the epidemic, so it was no surprise that investors appeared unwilling to chase prices today," Su said.
According to the TWSE, foreign institutional investors sold a net NT$539 million in shares Wednesday after a net sell of NT$4.03 billion a session earlier.
The electronics sector continued to move higher, rising 0.28 percent, but the gains were capped by concerns over the epidemic's effect on economic supply chains.
"China is locking down several major cities to contain the virus. Many investors are worried about the possible impact on the production of Taiwanese high tech companies operating on the mainland," Su said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 0.77 percent to close at NT$327.50, after hitting a high of NT$329.50.
Led by TSMC, the semiconductor sub index rose 0.61 percent.
Integrated circuit packaging and testing services provider ASE Technology Holding Co. closed 1.49 percent higher at NT$74.80, and dynamic random access memory (DRAM) chipmaker Nanya Technology Corp. gained 5.63 percent to end at NT$84.80 on hopes that DRAM prices will rebound.
Bucking the upturn, iPhone assembler Hon Hai Precision Co. closed unchanged at NT$82.20 after hitting a high of NT$82.70 on worries over its iPhone production in China.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell 0.10 percent to end at NT$4,830.00, off a high of NT$4,910.00.
Su said the financial sector, which rose 0.48 percent, also lent support to the broader market because of its relatively low valuations. "I think government led funds picked up financial heavyweights in a bid to maintain the strength of the Taiex."
In the sector, Fubon Financial Holding Co. rose 0.78 percent to close at NT$45.40, Mega Financial Holding Co. gained 0.63 percent to end at NT$32.00, and Cathay Financial Holding Co. added 0.61 percent to close at NT$40.95.
But old economy stocks largely moved lower, led by the petrochemical sector on a fall in crude oil prices overnight, Su said.
"The losses pointed to worries over the global economy amid the virus spread," he said.
Among them, Nan Ya Plastics Corp. fell 1.71 percent to close at NT$68.90, and Formosa Chemicals and Fibre Corp. lost 1.20 percent to end at NT$82.50.
Su said the Taiex could see more volatility and the nearest technical support could be seen at around 11,400 points.
Source: Focus Taiwan News Channel