Taiwan shares end up with Hon Hai boosted by bargain hunting

Taipei-Shares in Taiwan moved higher Friday, off an earlier low, as bargain hunters rushed to pick up tech stocks with relative low valuations, such as iPhone assembler Hon Hai Precision Industry Co., amid optimism over peak season effects in the fourth quarter, dealers said.

However, sentiment remained cautious about global trade after Chile canceled an APEC summit previously scheduled for later this month, where the United States and China had previously planned to sign a first phase trade agreement, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 40.82 points, or 0.36 percent, at the day's high of 11,399.53, coming off an earlier low of 11,335.51, on turnover of NT$133.25 billion (US$4.38 billion).

The market opened up 0.13 percent on a mild technical rebound from a session earlier, when the Taiex ended down 0.19 percent, but soon fell into negative territory as investors took their cue from losses suffered by the U.S. markets, where the Dow Jones Industrial Average closed down 0.52 percent and the S&P 500 index ended down 0.30 percent overnight, dealers said.

However, with the Taiex falling below the 5-day moving average of 11,357 points, buying re-emerged with select tech stocks in focus, in particular Hon Hai, to help the broader market return to positive territory and even close at the day's high, they said.

"It seems that the main board has strong technical support around the 5-day moving average for now," Hua Nan Securities analyst Kevin Su said. "Investors tended to buy into stocks like Hon Hai, which has lagged behind the electronics sector and is expected to benefit from peak season effects in the fourth quarter."

Hon Hai, the second largest stock in terms of market capitalization in Taiwan, rose 5.21 percent to close at NT$84.80 with 123.14 million shares changing hands.

"Look at the huge trading volume of Hon Hai. I think high liquidity in the market just prompted investors who are sitting on large cash holdings to park their money," Su said. "Many investors have been upbeat about sales of the newest iPhone 11 series," which went on global sale in September.

Buying also spread to other Apple concept stocks, with metal casing maker Catcher Technology Corp. up 2.71 percent to close at NT$265.00, and Pegatron Corp., a smaller iPhone assembler, up 1.52 percent to end at NT$60.20.

Against the upturn, shares in Largan Precision Co., a supplier of smartphone camera lenses to Apple, fell 0.22 percent to close at NT$4,460.00.

In addition, "TSMC (Taiwan Semiconductor Manufacturing Co.) came off a low to close higher, although the stock has gained sharply in recent sessions amid sound fundamentals, which also gave support to the Taiex," Su said.

TSMC, the most heavily weighted stock on the local market, rose 0.17 percent to close at NT$299.00 after hitting a low of NT$296.50 with 30.09 million shares changing hands. Su said the stock is expected to see stiff technical resistance at around NT$300.00.

The bellwether electronics sector, which closed up 0.57 percent and accounted for more than 70 percent of total turnover, served as the mainstream sector Friday, but non-tech stocks remained largely in the doldrums.

Among the mixed old economy stocks, food brand Uni-President Enterprises Corp. fell 1.33 percent to close at NT$74.20, and Kindom Construction Corp. lost 1.58 percent to end at NT$31.20, while Formosa Plastics Corp. rose 0.31 percent to end at NT$98.10.

In the financial sector, which closed up 0.08 percent, CTBC Financial Holding Co. gained 0.24 percent to end at NT$21.25, while Cathay Financial Holding Co. lost 0.50 percent to close at NT$40.10.

"The market is still watching when Washington and Beijing will sign their trade agreement now the APEC summit has been canceled," Su said. "Such cancellation has created more uncertainty over global trade."

According to the TWSE, foreign institutional investors bought a net NT$8.79 billion worth of shares on the main board Friday, marking the 15th consecutive session of net buying.

Source: Focus Taiwan News Channel