Shares in Taiwan staged a technical rebound on Tuesday led by the financial sector to close above the 9,000-point level, dealers said.
Large-cap stocks in the bellwether electronics sector, such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???), also rebounded from a day earlier, and gains by stocks in the cement, food and plastics sectors added further support to the broader market, they said.
The weighted index on the Taiwan Stock Exchange ended up 49.12 points, or 0.55 percent, at 9,030.93, after moving between 8,986.76 and 9,046.30, on turnover of NT$64.90 billion (US$2.05 billion).
The market opened up 5.26 points, and buying continued throughout the session as investors picked up bargains after a fall a day earlier, dealers said.
But once the index breached the 9,000-point mark, some selling set in to limit the day's rise, they said.
"I think the gains were simply technical in nature," equity market analyst Vickie Hsieh said. "The index failed to stay above the 5-day moving average at around 9,052 points, meaning that the market remains technically weak, and the index could test 9,000 again soon."
The weighted index had remained above 9,000 points for 15 consecutive trading sessions before closing at 8,981.81 on Monday.
Hsieh said Tuesday's buying largely came as concerns eased over the impact of a heavy fine on Mega International Commercial Bank . The financial sub-index closed up 0.88 percent.
Mega Financial Holding Co. , the parent company of Mega Bank, fell 0.22 percent to close at NT$22.25.
The stock plunged 6.3 percent on Monday after the Department of Financial Service (DFS) of New York State announced over the weekend that it had imposed a US$180 million fine imposed on Mega Bank's New York branch.
The branch was found to have violated the U.S. Bank Secrecy Act, which is also known as the anti-money laundering law.
With Mega Financial stabilizing, Fubon Financial Holding Co. gained 2.70 percent to close at NT$41.90, and Cathay Financial Holding Co. (???) rose 2.16 percent to end at NT$37.80.
In the electronics sector, which gained 0.50 percent, TSMC, the most heavily weighted stock in the local equity market, rose 0.58 percent to close at NT$174.00.
IC packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) added 1.47 percent to end at NT$37.90.
Among other electronics heavyweights, smartphone camera lens supplier Largan Precision Co. (???) rose 0.97 percent to close at NT$3,640,00 to remain the most expensive stock here, and PC brand Asustek Computer Inc. (??) added 0.74 percent to end at NT$271.00.
In the old-economy sector, Asia Cement Corp. (??) gained 3.00 percent to close at NT$30.90, cooking oil supplier Great Wall Enterprise Co. (??) rose 2.21 percent to end at NT$27.80, and Formosa Plastics Corp. (??) added 1.54 percent to close at NT$79.30.
Hsieh said other factors pointed to the technical nature of the day's rebound as uncertainty continues to hover over the market.
"Look at the thin turnover. I think many investors simply stayed on the sidelines, waiting for more indications of what the U.S. Federal Reserve will do on monetary policy in the face of the hawkish stance on rate hikes held by a couple of Fed presidents," Hsieh said.
Source: Focus Taiwan