Taipei, Shares in Taiwan extended their momentum from a day earlier to close higher on Friday, but the rise was capped at the nearest point of technical resistance ahead of 10,900 points, dealers said.
The bellwether electronics sector continued to drive the gains on Taiwan's main exchange, led by iPhone assembler Hon Hai Precision Industry Co., after its Internet-focused subsidiary got the green light from Chinese authorities to launch an initial public offering in Shanghai, they said.
Turnover remained moderate as many investors stayed on the sidelines, waiting to see in which direction U.S. markets will go after recent volatility there, they said.
The weighted index on the Taiwan Stock Exchange, or the Taiex, closed up 41.58 points, or 0.38 percent, at 10,864.82, after moving between 10,845.38 and 10,882.75, on turnover of NT$122.89 billion (US$4.19 billion).
The market opened up 0.23 percent after the Dow Jones Industrial Average closed up 0.38 percent and the tech-heavy Nasdaq index ended up 0.42 percent overnight, dealers said.
The buying momentum continued, but the Taiex moved in a narrow range ahead of 10,900 points for the rest of the session as many investors feared a possible correction would follow, dealers said.
"Today's turnover was not big enough to push the Taiex past the 10,937 points, the intra-day high seen on Feb. 27, or even the 10,900-point mark," Concord Securities analyst Kerry Huang said.
"It seemed many investors remain reluctant to chase prices for the time being, which limited trading volume."
Huang said the electronics sector served as the market's anchor again Friday, accounting for about 70 percent of total turnover and gaining 0.54 percent on the day.
Hon Hai, the stock with the second highest market value on the exchange, rose 2.80 percent to close at NT$91.90 after hitting a high of NT$92.30, with 86.52 million shares changing hands.
The stock attracted strong buying soon after the market opened after subsidiary Foxconn Industrial Internet Co. Ltd. (FII) secured approval from the China Securities Regulatory Commission (CSRC) to raise 27 billion Chinese yuan (US$4.3 billion) in an IPO on the Shanghai Stock Exchange.
It took FII just 36 days from the time it submitted its IPO application to the CSRC to get the green light, showing that China is keen to woo high-tech firms to list there in support of its technology and innovation sector.
Also in the electronics sector, contract chipmaker Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market, rose 0.40 percent to close at NT$250.50, off a high of NT$251.00.
Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 3.90 percent to close at NT$3,860.00, and integrated circuit packaging and testing firm Advanced Semiconductor Engineering Inc. added 0.95 percent to end at NT$42.45.
Stocks in the non-high-tech sector closed mixed as the electronics sector soaked up most of the funds on Friday, dealers said.
Among them, Nan Ya Plastics Corp. gained 0.38 percent to close at NT$79.30, while China Steel Structure Corp. fell 1.87 percent to end at NT$21.00, and textile firm Far Eastern New Century Corp. lost 0.39 percent to end at NT$25.65.
"Since Wall Street has entered consolidation, the local market is expected to follow suit in the near future," Huang said. "Unless turnover expands to NT$130 billion or higher, it will be hard to jump over the nearest technical hurdles."
Despite the gains in the Taiex, foreign institutional investors sold a net NT$1.98 billion worth of shares on the main board Friday, according to the TWSE.
Source: Focus Taiwan News Channel