Shares in Taiwan extended momentum from a session earlier, but the upturn was capped as many large cap tech stocks gave up their initial gains, dealers said.
Market sentiment remains dictated by how and when the U.S. Federal Reserve will start to scale down its asset purchase program, with many investors anxiously waiting for the upcoming annual symposium for global central bankers scheduled to take place in Jackson Hole, Wyoming on Thursday, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 76.89 points, or 0.46 percent, at 16,818.73, after moving between 16,779.90 and 16,904.30. Turnover totaled NT$413.14 billion (US$14.81 billion).
The market opened up 0.53 percent and soon rose to the day's high in the early morning session, led by the bellwether electronics sector in the wake of the all-time high enjoyed by the tech-heavy Nasdaq index overnight, dealers said.
However, as some investors shifted to the sell side to lock in the gains built for many large cap tech stocks after the Taiex breached the 16,900 point mark at one point, buying rotated to the financial sector and select old economy stocks, helping to stabilize the broader market to the end of the session, dealers added.
"After yesterday's rally, momentum continued today, but technical resistance emerged ahead of 16,900 points to compromise the gains," Mega International Investment Services Corp. analyst Alex Huang said. On Monday, the Taiex soared 2.45 percent.
"Profit taking focused on large semiconductor stocks throughout the session, but fortunately, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) remained resilient, serving as an anchor to prevent losses for the tech sector as a whole," Huang said.
The electronics sector rose 0.37 percent to close at 793.11 after coming off a high of 799.20, with the semiconductor sub-index up 0.58 percent.
TSMC, the most heavily weighted stock on the local market, rose 1.06 percent to end at NT$572.00 after hitting a high of NT$575.00. "TSMC's fundamentals are sound but the stock faces high technical hurdles ahead of NT$573.00."
Bucking TSMC's upturn, United Microelectronics Corp., a smaller contract chipmaker, fell 0.34 percent to end at NT$584.00, off a high of NT$60.10, and integrated circuit designer MediaTek Inc. lost 0.22 percent to close at NT$909.00, after hitting a high of NT$920.00.
Amid concerns over a decline in flat screen prices due to weakening demand, shares in Novatek Microelectronics Corp., a supplier of drive ICs for flat panel use, plunged 4.06 percent to end at NT$461.00.
Flat screen makers also came under pressure with AU Optronics Corp. down 6.56 percent to close at NT$17.80, and rival Innolux Corp. falling 7.36 percent to end at NT$17.00.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 1.40 percent to close at NT$109.00 after it announced a deal to set up a US$80 million joint venture with multinational automotive manufacturer Stellantis NV will be signed as early as Oct. 31.
"Rotational buying remained a theme on the local main board with financial and old economy stocks in focus," Huang said.
In the financial sector, which rose 1.31 percent, Cathay Financial Holding Co. rose 1.27 percent to close at NT$55.80, and Fubon Financial Holding Co. gained 1.77 percent to end at NT$80.40.
After a spike in international crude oil prices overnight, the petrochemical sector rose 1.42 percent with Formosa Petrochemical Corp. up 2.37 percent to close at NT$95.00, and Formosa Plastics Corp. up 1.12 percent to end at NT$99.10.
Major shipping stocks saw profit taking after earlier gains. Among them, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, lost 2.78 percent to close at NT$140.00, and rival Yang Ming Marine Transport Corp. fell 3.58 percent to end at NT$134.50.
"Uncertainty over the Fed's monetary policy continues to serve as a factor in market movement," Huang said. "Many investors at home and abroad are waiting for what Fed Chair Jerome Powell will say at the Jackson Hole meeting."
Despite a higher Taiex, foreign institutional investors sold a net NT$11.27 billion worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel