Taiwan shares end on technical rebound, gains capped

Taipei--Shares in Taiwan closed slightly higher on a technical rebound Saturday, but the upturn was limited ahead of the nearest technical resistance level at around 9,800 points, dealers said.

While many large cap high-tech stocks remained slow throughout the session, rotational buying in select small and medium-sized stocks in the solar energy business and the gains posted by shipping firms lent support to the broader market, the dealers said.

The weighted index on the Taiwan Stock Exchange ended up 20.16 points, or 0.21 percent, at 9,779.92, after moving between 9,770.75 and 9,791.35, on turnover of NT$61.67 billion (US$1.99 billion).

The market opened up 0.12 percent as shares bounced back from a fall seen a session earlier and managed to float above the previous closing level for the rest of the trade on active rotational buying in small cap stocks, the dealers said.

However, turnover was reduced to some extent as many foreign institutional investors were absent from the trading floor since Taiwan was the only equity market in the world to open Saturday, when foreign investors took a day off. The local main board opened to make up the loss of a business day due to a lengthened national holiday scheduled for next week.

"Without visible participation by foreign institutional investors, today's turnover shrank," Ta Ching Securities analyst Andy Hsu said. "On the reduced trading volume, it was not surprising that the weighted index could not overcome the strong technical resistance ahead of 9,800 points."

"There were signs that retail investors have been returning to the local market, picking up small and medium-sized stocks. The local main board remained awash in ample liquidity," Hsu said.

According to the Financial Supervisory Commission, the top financial regulator in Taiwan, the average daily investment by retail investors from Feb. 2-14 after the Lunar New Year holiday ended on Feb. 1, was NT$23.82 billion, higher than January's average of NT$60.43 billion.

Among the gaining small cap stocks in the solar energy sector, Sino-American Silicon Products Inc. (???) gained 2.43 percent to close at NT$46.40, and Giga Solar Materials Corp. (??) rose 3.18 percent to end at NT$373.00 as investors took cues from gains posted by U.S. solar energy stocks overnight.

In the shipping sector, Sincere Navigation Corp. (???) added 6.51 percent to close at NT$24.55, and U-Ming Marine Transport Corp. (???) rose 4 percent to end at NT$31.20.

Bucking the upturn on the broader market, market heavyweight Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., fell 0.66 percent to close at NT$4,500.00, but remained the most expensive stock in the local market.

In addition, Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, lost 0.11 percent to end at NT$89.90, and Advanced Semiconductor Engineering Inc. (???), the world's largest integrated circuit packaging and testing services provider, dropped 0.66 percent to close at NT$37.80.

Contract chip maker Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock on the main board, ended unchanged at NT$189.50.

"Since retail investors have become more willing to trade, the local main board is expected to continue to move higher," Hsu said. "After foreign institutional investors return to the market after this weekend, turnover is expected to expand, helping the weighted index challenge 9,800 points soon."

Source: Focus Taiwan News Channel