Taiwan shares rebound, gains capped ahead of 9,500 points

Taipei-- Shares in Taiwan staged a technical rebound Friday from a fall seen a session earlier, led by non-high-tech stocks, but the gains were capped ahead of the technical resistance point of 9,500 points, dealers said.

Market sentiment remained cautious amid fears that U.S. President Donald Trump will slap sanctions upon Iran, which tested a medium-range ballistic missile Jan. 29, as well as concerns that Trump will come up with measures to echo his protectionist stance, the dealers said.

Many investors here also watched closely the upcoming non-farm payroll data due later in the day in Washington for more clues about the U.S. economy and how the Federal Reserve will adjust its monetary policy after it left its key interest rates unchanged earlier this week, they added.

The weighted index on the Taiwan Stock Exchange closed up 26.59 points, or 0.28 percent, at 9,455.56, after moving between 9,423.93 and 9,478.01, on turnover of NT$99.24 billion (US$3.2 billion).

The market opened up 0.22 percent as it bounced back from a 0.20 percent fall seen Feb. 2, but with the index moving closer to the psychological 9,500-point level, selling set in to push down share prices into negative territory before late-session buying emerged to vault the index back into the black by the end of the session, the dealers said.

Old economy stocks, in particular in the petrochemical and steel sectors, served as an anchor to stabilize the broader market, while large-cap high-tech stocks remained in the doldrums with smartphone camera lens supplier Largan Precision Co. (???), the most expensive stock in Taiwan, pulling back from an upturn in the previous session, they said.

"It was not easy for the weighted index to stand well above 9,500 points, since there has been strong technical resistance," Concord Securities analyst Kerry Huang said.

"In addition to the technical concerns, the global financial markets have been shadowed by uncertainty created by Trump. The immediate fears are possible sanctions against Iran," Huang said.

On Feb. 1, U.S. National Security Adviser Gen. Michael Flynn said the White House was "officially putting Iran on notice." The U.S. media cited senior White House officials as saying that sanctions on Iran are "in the works."

"Since many market heavyweights on the local main board remained slow, it was no surprise that the index moved in a narrow range throughout Friday's session," Huang said.

Among the large-cap high-tech stocks, Largan, a supplier to Apple Inc., fell 1.32 percent to close at NT$4,490.00 after the stock ended at a new high of NT$4,550.00 a day earlier after the U.S. consumer electronics giant reported better-than-expected earnings for the October-December period.

While Largan fell, buying rotated to another Apple supplier -- metal casing maker Catcher Technology Co. (??) -- which gained 2.20 percent to end at NT$256.00, while Hon Hai Precision Industry Co., an assembler of iPhones and iPads, lost 0.48 percent to close at NT$83.70.

Contract chip maker Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock in the local market, closed unchanged at NT$184.50, off an early low of NT$183.50 on late-session buying.

"Fortunately, the old economy sector lent support to the broader market as raw material prices continued to increase," Huang said.

In the petrochemical sector, China Petrochemical Development Corp. (???) rose 3.31 percent to close at NT$12.50, and Formosa Chemicals & Fibre Corp. (??) gained 0.53 percent to end at NT$95.70.

Meanwhile, China Steel Corp. (??), the biggest steelmaker in Taiwan, added 0.59 percent to close at NT$25.55.

According to the TWSE, foreign institutional investors sold a net NT$5.23 billion-worth of shares on the main board Friday.

Source: Focus Taiwan News Channel