Taiwan shares end higher but off early high

Taipei, Shares in Taiwan closed higher but came off an earlier high Wednesday as investors locked in profits ahead of stiff technical resistance at around 16,000 points, dealers said.

Large cap semiconductor stocks suffered more obvious profit-taking during the session, while buying continued to rotate to the old economy and financial sectors to give the broader market a boost, they said.

The Taiex, the weighted index of the Taiwan Stock Exchange (TWSE), ended up 58.58 points, or 0.37 percent, at 15,911.67, after moving between 15,857.32 and 15,986.07. Turnover totaled NT$260.01 billion (US$9.17 billion).

The market opened up 0.43 percent and soon rose to the day’s high in early trading, led by semiconductor heavyweights, as investors were encouraged by the tech-heavy Nasdaq’s 3.69 percent gain overnight, dealers said.

As the Taiex rose toward the 16,000-point mark and started to face high technical barriers, selling emerged in semiconductor stocks amid fears over a major pullback, capping the broader market’s upturn, they said.

“Judging by today’s events, I think investors turned cautious and just wanted to take a pause since there has been strong technical resistance at around 16,025 points, the 20-day moving average,” Concord Securities analyst Kerry Huang said.

“So despite an initial strong showing made by big semiconductor stocks, investors appeared reluctant to chase prices, which kept turnover moderate,” Huang said.

Huang said contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, remained dominant in the broader market, and “as the stock came off its early high, the Taiex just followed.”

TSMC rose 0.34 percent to close at NT$597.00 after hitting NT$601.00. “It seemed it was hard for the stock to jump over the high technical barriers ahead of the NT$600 mark,” Huang said.

“But the chipmaker is still fundamentally healthy so some bargain hunters were willing to buy late in the trading session to prevent the stock from falling further.”

Following TSMC’s fluctuations, the semiconductor sub-index closed at 398.06, off a high of 401.41, up 0.34 percent.

Huang said other leading semiconductor stocks also saw their gains pared by the end of the session.

United Microelectronics Corp., a smaller contract chipmaker, closed 0.43 percent higher at NT$46.55, off a high of NT$47.35, and integrated circuit designer MediaTek Inc. fell 1.71 percent to close at NT$864.00 after hitting NT$892.00.

Also in the electronics sector, smartphone camera lens supplier Ability Opto-Electronics Technology Co. soared 10 percent, the maximum daily increase, to close at NT$55.90 after rival Largan Precision Co. agreed to acquire a 15.2 percent stake in the company through a private placement.

But Largan fell 2.55 percent to end at NT$3,435.00.

“While the tech sector lost some of its luster, select old economy stocks served as an anchor, helping the market manage to close above the previous closing level,” Huang said. “Such rotational buying was sparked by a hike in raw material prices as global demand is rebounding.”

The petrochemical sector was one of the old economy industries to attract rotational buying, closing up 0.75 percent, dealers said.

In the sector, Taita Chemical Co. soared 6.87 percent to end at NT$42.80, Formosa Plastics Corp. gained 1.95 percent to close at NT$104.50, and Nan Ya Plastics Corp. added 1.36 percent to end at NT$74.60.

Elsewhere, Eclat Textile Co. rose 3.24 percent to close at NT$462.50, and rival Makalot Industrial Co. gained 5.33 percent to end at NT$217.50.

The financial sector continued an uptrend on an increase in interest rates, with E. Sun Financial Holding Co. up 1.17 percent to close at NT$26.00, Fubon Financial Holding Co. up 0.56 percent to end at NT$54.00, and Cathay Financial Holding Co. also up 0.56 percent to close at NT$44.55.

“Amid concerns over possible volatility in global markets, I expect the Taiex will continue to move in consolidation mode in a near term with the nearest technical support at 15,636 points, the intraday low on March 5,” Huang said.

Despite the gains in the Taiex, foreign institutional investors sold a net NT$3.82 billion in shares Wednesday, according to the TWSE.

 

Source: Focus Taiwan News Channel

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