Taipei-Shares in Taiwan bounced back from early losses to close higher Tuesday, but market sentiment remained cautious, with many investors staying on the sidelines, awaiting the release of the minutes of the United States Federal Reserve’s last policymaking meeting in early November, dealers said.
The bellwether electronics sector led the rebound, with large-cap semiconductor stocks in focus, while buying was also seen in financial and old economy stocks, particularly in the petrochemical sector, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 92.81 points, or 0.64 percent, at 14,542.20, after moving between 14,371.09 and 14,542.79. Turnover totaled NT$190.36 billion (US$6.11 billion).
The market opened down 0.31 percent on follow through selling from the previous session when the Taiex fell 0.38 percent. Investors cut their holdings in electronics stocks, taking cues from the 1.09 percent drop on the tech-heavy Nasdaq index in the U.S. overnight, dealers said.
After the Taiex fell below 14,400 points, however, buying emerged, with bargain hunters rushing to pick up large-cap financial stocks and semiconductor heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which helped the broader market recover from its early weakness to close near the day’s high, dealers said.
“Today, bargain hunters favored market heavyweights such as TSMC, but I think the buying came largely from government-led funds, as the authorities do not want the market to weaken more ahead of the (Nov. 26) local government elections,” Hua Nan Securities analyst Kevin Su said.
He said that TSMC, the most heavily weighted stock on the Taiex, has become the most convenient tool “to manipulate the index,” as sentiment remains cautious about the economic impact of the Fed’s aggressive interest rate hike.
On Tuesday, TSMC rose 1.87 percent to close at the day’s high of NT$491.00, after coming off a low of NT$476.00. Its gains contributed about 70 points to the Taiex’s increase and led the electronics sector and the semiconductor sub-index higher by 0.78 percent and 1.30 percent, respectively.
“The stock, however, continued to fluctuate in a narrow range ahead of the stiff technical resistance point of NT$500,” Su noted.
Among other semiconductor stocks, United Microelectronics Corp. (UMC), a smaller contract chipmaker, added 0.99 percent to end at NT$46.10, and IC packaging and testing services provider ASE Technology Holding Co. gained 0.64 percent to close at NT$94.80.
Failing to ride the upturn, application-specific integrated circuit (ASIC) designer Alchip Technologies Ltd. lost 3.15 percent to end at NT$862.00, TSMC’s ASIC design subsidiary Global Unichip Corp. fell 2.31 percent to close at NT$718.00, and smartphone IC designer MediaTek Inc. ended down 0.97 percent at NT$713.00.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.50 percent to close at NT$100.50, while flat panel makers AU Optronics Corp. and Innolux Corp. lost 1.83 percent and 0.81 percent, respectively, to end at NT$16.05 and NT$12.20, on falling product prices.
“The government’s intervention in the market was also evident in the financial sector, which has been one of the funds’ favorites,” Su said. “Large-cap financial holding firms also helped to anchor the Taiex today.”
In the sector, which rose 0.69 percent, CTBC Financial Holding Co. gained 1.17 percent to close at NT$21.65, Mega Financial Holding Co. climbed 1.15 percent to end at NT$30.90, Fubon Financial Holding Co. added 0.72 percent to close at NT$55.90, and Cathay Financial Holding Co. ended 0.24 percent higher at NT$42.20.
In the old economy sector, petrochemical stocks were boosted by Saudi Arabia’s denial of reports that it was in discussions with its allies and OPEC to increase oil supplies.
Nan Ya Plastics Corp. gained 2.57 percent to close at NT$75.80, Formosa Plastics Corp. gained 0.80 percent to end at NT$88.70, and Formosa Petrochemical Corp. finished 0.72 percent higher at NT$83.40. Formosa Chemicals & Fibre Corp., however, fell 0.41 percent to end at NT$72.50.
Elsewhere, the transportation industry gained 0.67 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rising 2.03 percent to close at NT$150.50, and rival Yang Ming Marine Transport Corp. ending up 0.49 percent at NT$61.70. However, Wan Hai Lines Ltd. lost 0.58 percent to close at NT$69.10.
“We have to pay close attention to the minutes of the Fed’s November meeting to gain clues about the pace of its rate hikes,” Su said. “We also have to keep a close eye on China’s COVID-19 lockdowns, which have raised concerns about global demand.”
Amid such uncertainty, he said, the Taiex is likely to encounter high technical hurdles ahead of 14,669 points, which was the intraday high on Nov. 18.
According to the TWSE, foreign institutional investors bought a net NT$590.32 million worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel