Taiwan shares close moderately higher, led by financial sector

Shares in Taiwan ended moderately higher Tuesday on a technical rebound from a session earlier with the financial sector in focus on expectations that the U.S. Federal Reserve will raise its key interest rates which could widen an interest spread for banks, helping them to rake in more profit, dealers said.

The bellwether electronics sector benefited from the late session buying to boost select stocks in the supply chain of Apple Inc., lending more support to the broader market, while turnover remained thin with many investors on the sidelines ahead of a conclusion of the Fed’s policymaking meeting due Wednesday, they said.

The weighted index on the Taiwan Stock Exchange ended up 32.20 points, or 0.34 percent at 9,382.14, after moving between 9,342.56 and 9,382.14, on turnover of NT$68.99 billion (US$2.17 billion).

The market opened up 0.13 percent in a knee-jerk reaction to another record high posted by the Dow Jones Industrial Average overnight, and the strength of the local main board continued until the end of the session, led by financial stocks, but moved in a narrow range for the rest of the session, dealers said.

The financial sector closed up 0.75 percent, outperforming other major sectors in the equity market.

“The market has widely anticipated that the Fed will raise its key interest rates by 0.25 percentage points in the two-day policymaking meeting (to open later in the day) at a time when the U.S, economy is steaming ahead,” Mega International Investment Services Corp. analyst Alex Huang said, referring to the third quarter gross domestic product growth at 3.2 percent in the third quarter and the strong job data for November.

“Under such circumstances, the banking sector is expected to benefit so buying rotated to financial stocks today, serving as an anchor to stabilize the broader market,” Huang said.

Among the gaining financial stocks, Fubon Financial Holding Co. (富邦金) rose 1.75 percent to close at NT$52.30, Yuanta Financial Holding Co. (元大金) added 1.26 percent to end at NT$12.05, and First Financial Holding Co. (第一金) gained 1.16 percent to close at NT$17.50.

“The electronics sector was lifted by the last ditch buying with so-called Apple concept stocks in focus but the gains were limited as the tech-heavy NASDAQ index retreated in the U.S. market,” Huang said. The local electronics sub-index closed up 0.26 percent.

Among the stocks in the Apple supply chain, smartphone camera lens supplier Largan Precision Co. (大立光) rose 0.40 percent to close at NT$3,750.00, off an early low of NT$3,695.00, to remain the most expensive stock in Taiwan.

Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads, gained 1.20 percent to end at NT$84.40, and Pegatron Corp. (和碩), which is said to share orders with Hon Hai to assemble the 4.7-inch iPhone 7, rose 0.13 percent to close at NT$75.60.

Contract chip maker Taiwan Semiconductor Manufacturing Co. (台積電), the most heavily weighted stock in the local market, rose 0.54 percent to end at NT$186.00, helping the electronics and semiconductor sectors move higher. The semiconductor sub-index ended up 0.25 percent.

In the old economy sector, Formosa Petrochemical Corp. (台塑化) soared 2.25 percent to close at NT$113.50 after crude oil prices in the U.S. market jumped 6.5 percent to a 18-month high amid eased fears over a global supply glut after oil producers agreed an output cut.

“Despite the gains, turnover remained thin. That’s why the index failed to jump over the stiff technical resistance ahead of 9,400 points,” Huang said. “The low trading volume largely came after many foreign institutional investors were away for the upcoming Christmas season.”

Source: Focus Taiwan News Channel

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