Taipei-Shares in Taiwan staged a technical rebound Tuesday from a more than 1 percent slump seen a session earlier, as investors took cues from strength on Wall Street amid eased political tension between the United States and North Korea, dealers said.
Large-cap stocks in the bellwether electronics sector, which drove the broader market down a day earlier, attracted bargain hunting, while select old economy stocks, in particular in the food and paper sectors, also moved higher, lending support to the main board, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 85.88 points, or 0.84 percent, at 10,311.16, after moving between 10,271.03 and 10,336.22, on turnover of NT$93.91 billion (US$3.1 billion).
The market opened up 0.45 percent on the back of a higher U.S. market, where the Dow Jones Industrial Average closed up 0.62 percent, and the tech-heavy NASDAQ index gained 1.34 percent overnight as investors were relieved to some extent about the political unease between Washington and Pyongyang, the dealers said.
Market sentiment at home and abroad improved after U.S. Secretary of State Rex Tillerson and Secretary of Defense James Mattis said that the current U.S. administration will continue to pursue diplomatic resolutions with Pyongyang, which has threatened to launch missiles toward the U.S. Pacific territory of Guam.
But with the local weighted index breaching the nearest technical resistance level of the 60-day moving average around 10,332 points, some investors shifted to the sell side to lock in earlier gains, capping the upturn by the end of the session, the dealers said.
"Today's gains were simply a technical rebound," Concord Securities analyst Kerry Huang said. "So, the high-tech sector, which suffered the heaviest selling on Monday, led the rebound on Tuesday, with buying focusing on large-cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???)."
The bellwether electronics sector closed up 1.07 percent, accounting for about 65 percent of the total turnover, dictating the movement of the broader market, the dealers said.
Contract chip maker TSMC, the most heavily weighted stock in the local market, rose 1.42 percent to close at NT$214.00, off an early high of NT$124.50, with 13.51 million shares changing hands, while iPhone assembler Hon Hai Precision Industry Co. (??), second to TSMC in terms of market capitalization, gained 1.32 percent to NT$115.50 after hitting the day's high of NT$116.00.
Also in the high-tech sector, Largan Precision Co. (???), a smartphone camera lens supplier, added 1.63 percent to close at NT$5,600.00, and integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) rose 1.90 percent to end at NT$37.60.
Bucking the upturn, metal casing maker Catcher Technology Co. (??) fell 0.94 percent to close at NT$369.00, off an early high of NT$380.50, as investors pocketed earlier gains, pushing down the stock into negative territory by the end of the session.
Huang said that buying also spread in the non-high-tech sector, with the paper sector closing up 2.61 percent and the food sector up 1.53 percent.
Among the gaining old economy stocks, paper maker Pao Long International Co. (??) gained 3.02 percent to close at NT$32.45, and rival YFY Inc. (???) also rose 3.02 percent to end at NT$10.25, while food brand Uni-President Enterprises Corp. (??) added 2.78 percent to close at NT$59.10.
"Despite the rebound, turnover failed to expand today, indicating that many investors remained reluctant to chase prices for the moment, watching closely how the geopolitical tension will evolve," Huang said.
"The local equity market is expected to remain in consolidation mode in the short term to move between 10,200 and 10,400 points," Huang said.
Source: Focus Taiwan News Channel