Shares in Taiwan closed slightly higher on reduced turnover Tuesday after moving in a narrow range throughout the session, as investors took a pause following a significant rebound a session earlier, dealers said.
While most stocks were traded in consolidation mode, select large-cap stocks in the bellwether electronics sector, such as contract chip maker Taiwan Semiconductor Manufacturing Co. (???) and smartphone camera lens supplier Largan Precision Co. (???) posted gains, despite limited upturn, lending support to the broader market, the dealers said.
Market sentiment turned cautious as the market moved closer to the psychological level of 9,200 points, and before the U.S. Federal Reserve was to kick off a two-day policymaking meeting later in the day, they added.
The weighted index on the Taiwan Stock Exchange (TWSE) ended up 8.70 points, or 0.10 percent, at 9,161.58, after moving between 9,130.90 and 9,173.46, on turnover of NT$68.49 billion (US$2.19 billion).
The market opened down 0.13 percent and fell to the day's low on a mild correction from a surge seen a session earlier, but with the weighted index moving closer to the 9,100-point mark, some buying emerged to push the broader market into positive territory, leading the broader market to trade in a small range for the rest of the session, the dealers said.
"Ahead of the stiff technical resistance at around 9,200 points, it was understandable that many investors retreated from the trading floor today, dragging turnover to less than NT$70 billion," Ta Ching Securities analyst Andy Hsu said.
Tuesday's trading volume was well below the NT$100.13 billion recorded a day earlier, when the weighted index closed up 2.81 percent.
"The market recouped its earlier losses, indicating that many investors, in particular foreign institutional investors, still expected the weighted index to keep moving ahead, so they did not unload their stocks on a large scale for the moment," Hsu said.
He added that foreign institutional investors still held a net 81,000 long-position futures contracts Monday, up about 9,000 from a session earlier. According to the TWSE, foreign institutional investors bought a net NT$930 million-worth of shares on the main board Tuesday.
Hsu said that buying still focused on select market heavyweights, such as TSMC and Largan, which prevented the weighted index from heading south at the end of the session.
TSMC, the most heavily weighted stock in the local market, gained 0.27 percent to close at NT$183.00, with 23.61 million shares changing hands, and Largan, a supplier to Apple Inc., rose 0.53 percent to end at NT$3,820.00.
Integrated circuit designer MediaTek Inc. (???) added 1.24 percent to close at NT$245.50 after U.S.-based telecom operator Sprint adopted the Taiwanese firm's Helio chipsets for its smartphones. Hsu said that since MediaTek shares had relatively low valuation, the stock was easily moved by positive leads like the orders from Sprint.
Bucking the upturn of these high-tech stocks, Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, fell 0.25 percent to close at NT$80.20.
In the non-high tech sector, Eclat Textile Co. (??) rose 1.82 percent to end at NT$363.50, while Formosa Plastics Corp. (??) fell 0.13 percent to close at NT$77.30, and Cathay Financial Holding Co. (???) lost 0.50 percent to end at NT$40.00.
"Today's low turnover also reflected caution about the Fed's meeting," Hsu said. "Although many in the market have expected the Fed will not raise interest rates in September, they still want to see the meeting conclusion before returning to the trading floor."
Source: Focus Taiwan News Channel