Taipei, Shares in Taiwan closed higher Wednesday as local Apple Inc. suppliers posted gains in the wake of the U.S. consumer electronics giant's better than expected earnings for the April-June period, dealers said.
The upturn, however, was limited as investors feared a major pullback after the main board's recent gains to stand above 11,000 points, dealers said. Market sentiment was also dictated by the U.S. Federal Reserve two-day policymaking meeting that started Tuesday, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 40.62 points, or 0.37 percent, at 11,098.13, after moving between 11,058.28 and 11,100.02. Turnover totaled NT$143.61 billion (US$4.69 billion) during the session.
The market opened up 4.85 points on follow-through buying from the previous session, when the Taiex closed up 0.22 percent, and buying continued with "Apple concept stocks" in focus after the U.S. company reported its second-quarter earnings, dealers said.
Apple on Tuesday posted second-quarter earnings per share of US$2.34, compared with US$1.67 a year earlier, and a 17 percent year-on-year increase in sales to US$53.3 billion.
"The local main board was moved by rotational buying," Mega International Investment Services Corp. analyst Alex Huang said. "The Apple earnings simply caused the buying to rotate to the bellwether electronics sector today."
Among the gaining suppliers to Apple, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, gained 0.81 percent to close at NT$248.00 with 29.10 million shares changing hands.
Led by TSMC, the bellwether electronics sector closed up 0.66 percent.
iPhone assembler Hon Hai Precision Industry Co., second only to TSMC in terms of market value, added 0.36 percent to end at NT$84.10, and Catcher Technology Co., a metal case supplier to Apple, gained 1.86 percent to close at NT$383.50.
However, Largan Precision Co., a smartphone camera lens supplier to Apple, fell 1.94 percent to end at NT$5,050.00 after hitting an early high of NT$5,330.00.
"Despite the gains posted by tech stocks, the broader market continued to move in consolidation mode as many investors appeared reluctant to chase prices after the Taiex breached 11,000 points last week," Huang said. "The market is expected to face strong technical resistance ahead of 11,261 points," he said.
On Wednesday, as the buying rotated to the electronics sector, investors started to dump their holdings in the old economy sector, locking in their recent gains, which compromised the upturn of the broader market, he said.
Among the falling large-cap old economy stocks, food brand Uni-President Enterprises Corp. shed 2.48 percent to end at NT$78.80, and President Chain Store Corp., which runs the 7-Eleven convenience stores in Taiwan, fell 1.77 percent to close at NT$306.00.
"Many investors preferred to stay on the sidelines, waiting for a statement by the Fed after its policymaking meeting, although no change in interest rates is expected this time," Huang said.
According to the TWSE, foreign institutional investors bought a net NT$1.20 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel