Taiwan shares close up, led by tech sector

Shares in Taiwan moved higher Friday as buying reemerged in the bellwether electronics sector, helping the broader market recoup its earlier losses caused by drops on the United States markets overnight, dealers said.

Turnover, however, remained thin with many investors staying on the sidelines, anxiously waiting for the upcoming December U.S. non-farm payroll data due later in the day, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 72.29 points, or 0.51 percent, at 14,373.34 after moving between 14,278.52 and 14,384.92. Turnover totaled NT$153.86 billion (US$5 billion).

The market opened down by 0.16 percent and soon dipped to the day's low in the early morning session in the wake of the losses on the U.S. markets.

On Thursday, the Dow Jones Industrial Average fell by 1.02 percent and the tech-heavy Nasdaq index fell by 1.47 percent as the ADP private payrolls report showed an increase of 235,000 jobs in December, well above economist estimates, which raised fears over the Fed's aggressive rate hikes, dealers said.

But, with the Taiex falling below the 14,300-point mark, bargain hunters rushed to pick up select tech stocks in the semiconductor sector to push the main board back into positive territory, which continued into the end of the trading session, dealers added.

While contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, underperformed the main board, closed unchanged at NT$458.00, the electronics sector rose by 0.63 percent with the semiconductor sub-index gaining by 0.79 percent.

In addition, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) designer, also ended unchanged at NT$650.00.

"Today, without TSMC absorbing large funds from the market, bargain hunting rotated to other semiconductor heavyweights, paying the path for a rebound from the initial losses to turn the Taiex around," Concord Securities analyst Kerry Huang said.

Among the other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker in Taiwan, rose by 2.79 percent to close at NT$42.40, UMC's display driver IC designer Novatek Microelectronics Corp. gained 3.83 percent to end at NT$352.00, and smartphone IC designer MediaTek Inc. soared by 4.60 percent to close at NT$660.00.

Meanwhile, IC packaging and testing services provider ASE Technology Holding Co. increased by 2.33 percent to end at NT$96.80.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose by 0.41 percent to close at NT$98.00.

Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., gained 3.81 percent to end at NT$2,180.00 after the company reported on Thursday a 2-percent year-on-year increase in consolidated sales totaling NT$47.68 billion, stopping a two-year falling streak.

In December, Largan's consolidated sales dropped by 23 percent from a month earlier to NT$4.02 billion, and the company said the January figure was likely to fall further on the reduced number of working days due to the 10-day Lunar New Year holiday.

"Turnover remained low today as many investors appeared reluctant to chase prices despite a rebound, and the slight trading interest made it hard for the Taiex to jump over the nearest technical resistance ahead of the 20-day moving average of 14,374 points," Huang said.

"Market sentiment was dictated by worries over a hawkish Fed, in particular after the strong ADP job data overnight," he said.

While the electronics sector attracted most of the buying, old economy stocks largely moved in consolidation, Huang said.

In the old economy sector, Formosa Plastics Corp. rose by 0.57 percent to close at NT$88.00, and Nan Ya Plastics Corp. gained 0.97 percent to end at NT$72.80.

Textile brand Far Eastern New Century Corp. edged up by 0.32 percent to close at NT$31.80, while Eclat Textile Co. fell by 0.82 percent to end at NT$485.00.

The transportation sector bounced back from a recent slump on the back of falling marine cargo freight rates on the global markets, rising by 0.57 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose by 1.60 percent to close at NT$159.00, and rival Wan Hai Lines Ltd. gained by 0.91 percent to end at NT$77.80.

Also in the sector, China Airlines rose by 1.61 percent to close at NT$18.95, and EVA Airways edged up by 0.18 percent to end at NT$28.05 amid optimism over eased border controls in Taiwan.

In the financial sector, which rose by 0.15 percent, Cathay Financial Holding Co. increased by 1.24 percent to close at NT$40.75, Hua Nan Financial Holding Co. rose by 0.66 percent to end at NT$22.80, and SinoPac Financial Holding Co. rose by 0.59 percent to close at NT$16.96.

Fubon Financial Holding Co. ended unchanged at NT$58.50.

"For more clues about what the Fed is likely to do next for its rate hike cycle, investors should pay close attention to the December job data due later in the day," Huang said. "But, before the upcoming Lunar New Year holiday, turnover is expected to remain light."

The last trading session is set for Jan. 17 before the holiday.

According to the TWSE, foreign institutional investors bought a net NT$9.84 billion worth of shares on the main board Friday.

Source: Focus Taiwan News Channel