Taipei--Shares in Taiwan closed higher Friday as the electronics sector recouped early losses, helping the broader market return to positive territory with buying especially evident late in the trading session, dealers said.
Shrugging off concerns over high valuations, investors decided to pick up large-cap stocks, in particular contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and contract electronics maker Hon Hai Precision Industry Co. (??), which had been in consolidation mode in recent sessions, they said.
The weighted index on the Taiwan Stock Exchange ended up 68.38 points, or 0.68 percent, at 10,156.73, after moving between 10,073.12 and 10,159.47, on turnover of NT$95.60 billion (US$3.14 billion).
The market opened down 9.66 points and soon fell to the day's low as investors reacted to sluggish market showings in the U.S., where the Dow Jones Industrial Average ended down 0.07 percent and the tech-heavy Nasdaq closed 0.47 percent lower overnight, dealers said.
But bargain hunters turned active in the mid-morning session, setting their sights on high-tech heavyweights, such as TSMC and Hon Hai, to help the market move into positive territory and breach the 10,100 point mark, they said.
"Despite a fall in the Nasdaq at the end of the session on Thursday, the index came off its earlier low," KGI Securities analyst Phil Chu said.
"It seemed that selling pressure in high-tech stocks in the U.S. market has been absorbed to some extent, which relieved many investors here."
In recent sessions, the local electronics sector faced downward pressure because of losses suffered by U.S. high-tech firms amid fears over high valuations, dealers said.
"After consolidating in the past few sessions, the local electronics sector appeared attractive to many bargain hunters, and they simply jumped in," Chu said.
"They took aim at large cap stocks including TSMC and Hon Hai hoping that they will benefit from peak season effects in the second half of this year," Chu said.
TSMC, the world's largest contract chip maker, gained 1.68 percent to close at NT$211.50 after hitting an early low of TN$207.00, with 32.82 million shares changing hands.
Hon Hai, an assembler of iPhones and iPads, gained 2.44 percent to end at NT$105.00, off a low of NT$102.50. The two companies have the biggest market capitalizations in Taiwan's stock market.
Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., added 0.75 percent to close at NT$4,730.00, while integrated circuit designer MediaTek Inc. (???) rose 0.80 percent to end at NT$253.00.
Chu said that while the electronics sector dominated the broader market Friday, many old economy and financial stocks remained in the doldrums throughout the session.
In the non-high-tech sector, Asia Cement Corp. (??) shed 1.90 percent to close at NT$25.75, while Formosa Petrochemical Corp. (???) ended unchanged at NT$106.00. Cathay Financial Holding Co. (???) lost 0.10 percent to close at NT$47.70.
"After today's gains, market sentiment has improved, paving the path for further gains. But stiff technical resistance is expected ahead of the 10,200 point mark," Chu said.
He said that the main board has strong technical support between 10,030 points and 10,050 points.
Source: Focus Taiwan News Channel