Shares in Taiwan closed slightly higher Friday in thin trading as many investors were cautious ahead of a speech by U.S. Federal Reserve Chairwoman Janet Yellen later in the day at a global central banker meeting in Wyoming, dealers said.
While most large cap stocks in the bellwether electronics sector remained slow, the financial sector, led by Cathay Financial Holding Co. (???), moved higher to lend support to the broader market because of its relatively low valuations, they said.
The weighted index on the Taiwan Stock Exchange closed up 16.25 points, or 0.18 percent, at the day's high of 9,131.72, after hitting a low of 9,092.08, on turnover of NT$64.56 billion (US$2.04 billion).
The market opened down 0.20 percent and soon fell to the day's low in reaction to overnight falls of 0.18 percent in the Dow Jones Industrial Average and 0.14 percent in the S&P 500 index, dealers said.
Buying in the financial sector emerged, however, to offset downward pressure on large-cap stocks in the electronics and old-economy sectors, helping the weighted index recover its earlier losses and end the day in positive territory, they said.
"Look at the low turnover. It was another boring session as many investors retreated from the trading floor, waiting for the Yellen speech," Hua Nan Securities analyst Kevin Su said.
Kansas City Fed President Esther George, who joined other Fed presidents to voice a hawkish stance on the central bank's monetary policy, told the press she will vote for a rate hike at a Fed policymaking meeting in September.
"So market sentiment has turned more cautious now as investors are anxious about Yellen's comments on the economy and any hints of a rate increase by the Fed," Su said.
"It was no surprise that today's turnover was low, which made it unlikely for electronics heavyweights to score any breakthroughs for the time being."
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock on the market, closed unchanged at NT$177.00, with 15.07 million shares changing hands.
Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple Inc., also ended unchanged at NT$88.50.
Integrated circuit designer MediaTek Inc. (???) fell 0.20 percent to close at NT$243.50, while smartphone camera lens supplier Largan Precision Co. (???) gained 1.53 percent to end at NT$3.640.00 to remain the most expensive stock here.
"Fortunately, the financial sector benefited from bargain hunting to push up the index to close above the previous day's level. But the broader market remained in consolidation mode without any fresh incentives for investors to trade," Su said.
In the financial sector, which closed up 0.23 percent, Cathay Financial rose 1.68 percent to close at NT$39.40 because of its better than expected results for the second quarter.
E. Sun Financial Holding Co. (???) gained 0.55 percent to end at NT$18.25 after foreign institutional investors raised their stake in the company to 55.30 percent, the highest among Taiwan's financial stocks.
Source: Focus Taiwan