Taipei-Shares in Taiwan closed moderately higher as late buying helped the broader market recoup earlier losses, but the main board moved in consolidation mode throughout the session after solid gains over the previous few days, dealers said.
The last ditch buying focused on the three largest cap stocks in the local equity market -- the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), iPhone assembler Hon Hai Precision Industry Co., and Formosa Petrochemical Corp. -- pushing the broader market into positive territory, they said.
Sentiment has turned cautious, capping the recent upturn as many investors wait for the upcoming earnings season with smartphone camera lens supplier Largan Precision Co. having scheduled an investor conference for Jan. 11, they added.
The weighted index on the Taiwan Stock Exchange closed up 31.17 points, or 0.29 percent, at the day's high of 10,879.80, off an early low of 10,815.68, on turnover of NT$140.86 billion (US$4.77 billion).
The market opened up 8.29 points but soon dipped into negative territory in the early morning session as local investors ignored a new record high on the Dow Jones Industrial Average, which breached the 25,000 point mark for the first time ever, dealers said.
The weighted index moved in a narrow range before buying remerged in late trading to lift the three top cap stocks as well as the financial sector to vault the broader market back into the black by the end of the session, they said.
"After a strong showing in the previous three sessions after the New Year holiday, it was no surprise that the main board entered consolidation mode for the moment," KGI Securities analyst Phil Chu said.
The weighted index gained 205.77 points or 1.93 percent in the first three sessions of the year.
"Looking at the movement. I think there was technical resistance ahead of the intraday high of 10,882 points on Nov. 22," Chu said. "But, after the current consolidation, it is expected that the technical hurdles will be overcome as long as the uptrend remains in place."
Largely thanks to late session interest in TSMC, Hon Hai and Formosa Petrochemical, Chu said, the local main board managed to end above the previous closing level.
TSMC, the world's largest contract chipmaker, gained 0.21 percent to close at NT$240.00, after hitting an early low of NT$238.00, with 22.41 million shares changing hands.
Hon Hai, which has been hit by worries over shipments of the premium iPhone X in recent sessions, rose 0.43 percent to close at NT$93.00, off an early low of NT$91.60, and Formosa Petrochemical added 0.84 percent to end at NT$120.00, off an early low of NT$119.00.
In the financial sector, which gained 0.74 percent also on late buying, shares in Cathay Financial Holding Co. rose 0.54 percent to close at NT$55.70, off an early low of NT$55.00, and CTBC Financial Holding Co. added 1.21 percent to end at NT$20.90 after hitting a low of NT$20.65.
"Cautious sentiment is expected to dominate the main board's movements before Largan releases its fourth quarter earnings and gives guidance for the first quarter next week, which will paint a clearer picture of how the iPhone X has been received on the global market," Chu said.
"Largan's results could move the broader market, but even if the weighted index faces downward pressure, strong technical support is expected at around 10,700 points," Chu added.
Underperforming the broader market, Largan fell 0.85 percent to close at NT$4,100.00, while Catcher Technology Co., a metal casing supplier to Apple, ended unchanged at NT$335.00.
Source: Focus Taiwan News Channel