Taipei--Shares in Taiwan closed slightly higher Tuesday amid cautious sentiment before Apple Inc. was to release its earnings for the second quarter and give guidance for the third quarter later in the day, dealers said.
Many large cap high tech stocks in the bellwether electronics sector, such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), remained in the doldrums, limiting the upturn enjoyed by the broader market, they said.
But select old economy stocks attracted buying to lend support to the market as investors rushed to take advantage of their relatively low valuations, they added.
The weighted index on the Taiwan Stock Exchange closed up 9.96 points, or 0.10 percent, at 10,437.29, after moving between 10,408.53 and 10,470.03, on turnover of NT$110.17 billion (US$3.65 billion).
The market opened up 0.18 percent and rose to the day's high on follow-through buying from a session earlier.
When the weighted index moved closer to the nearest technical resistance ahead of 10,500 points, however, some investors pocketed gains to limit the upturn by the end of the session, dealers said.
"The technical hurdles ahead of 10,500 points remained high. So without significant gains posted by market heavyweights such as TSMC, it was hard to get over the technical resistance," Mega International Investment Services Corp. analyst Alex Huang said.
"Investors remained cautious before Apple's investor conference later in the day, waiting for the company's results (for the April-June period) and guidance (for the current quarter)," Huang said.
Taiwanese suppliers to Apple account for about 40 percent of the total market capitalization in Taiwan's stock market.
TSMC, which is believed to be supplying the A11 processor for the next generation iPhones, fell 1.17 percent to close at NT$212.00.
Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, lost 0.85 percent to end at NT$116.50, and Largan Precision Co., a smartphone camera lens supplier to Apple, fell 0.18 percent to close at NT$5,500.00.
But buying in some smaller Apple suppliers emerged after having been in consolidation mode for some time to attract bargain hunters, Huang said.
Among them, metal casing maker Casetek Holdings Ltd. (??) gained 8.49 percent to close at NT$103.50, and rival Catcher Technology Co. (??) rose 5.19 percent to end at NT$365.00.
"But their gains were not strong enough to vault the weighted index past the 10,500-point mark," Huang said.
In addition, integrated circuit designer MediaTek Inc. (???) soared 10 percent, the maximum daily increase, to close at NT$292.50 after its gross margin for the second quarter rose to 35 percent from 33.5 percent seen in the first quarter.
In the old economy sector, China Steel Corp. (??) gained 1.41 percent to close at NT$25.15, and Eclat Textile Co. (??) rose 1.58 percent to end at NT$353.00 on the back of a recovery in raw material prices.
"The failure of the market to make a strong showing today also resulted from fears of further volatility among high tech stocks in the U.S. market. Valuations of U.S. tech stocks are high at the moment," Huang said.
The tech-heavy Nasdaq index closed down 0.42 percent on Monday, while the Dow Jones Industrial Average ended up 0.28 percent at a record high.
Source: Focus Taiwan News Channel