Taipei, May 4 (CNA) Bargain hunting emerged Friday, pushing the local bourse higher at the end of the session and helping the broader market fend off rising concerns over the global economy after U.S. released disappointing data overnight, dealers said.
After recent corrections, select large cap electronics stocks, such as smartphone vendor HTC Corp. and cell phone camera lens supplier Largan Precision Co., attracted buying that helped the index rebound from the day's low, dealers said.
The weighted index closed up 41.42 points or 0.54 percent at 7,700.95, after moving between 7,614.99 and 7,704.87. Turnover during the session totaled NT$87.93 billion (US$3.0 billion).
The market opened down 0.58 percent as investors took cues from a retreat on Wall Street overnight after the Institute of Supply Management reported a pullback in activity in the U.S. service sector, dealers said. The U.S. service index fell below market expectations to 53.5 in April from 56 in March.
However, after the benchmark weighted index moved closer to 7,600 points in the early morning session, bargain hunters began picking up stocks that had been depressed recently, which pushed the index back into positive territory, dealers said.
"The gains posted by these electronics heavyweights were simply a technical rebound after the recent slump," Grand Cathay Securities analyst Mars Hsu said. "Basically, the market was supported by ample liquidity."
Hsu said bargain hunting also spread to the old economy sector by the end of the session on the back of rotational buying.
Among the winning stocks, HTC rose 4.31 percent to close at NT$471.50, Largan gained 1.69 percent to end at NT$480.00, while Kuoyang Construction closed up 7 percent, the maximum daily increase, at NT$11.75.
Bucking the uptrend of the broader market, Taiwan Semiconductor Manufacturing Co. fell 1.46 percent to end at NT$87.60 and rival United Microelectronics Corp. lost 1.93 percent to close at NT$15.25 after their American depositary receipts weakened on Wall Street overnight.
"After Wednesday's 2.33 percent advance, the market has come closer to the nearest technical resistance at around 7,700 points and entered a consolidation mode," Hsu said.
Hsu said investors had better watch closely how the U.S. will report its April jobless rate later in the day, to gain a better understanding of the global economic fundamentals.
At the end of the session, the construction sector scored the highest gains among the eight largest sectors of the market, finishing up 1.5 percent, after home transactions in the great Taipei area increased last month.
Foodstuffs rose 1.3 percent, plastics and chemicals, and textiles added 0.7 percent, financials gained 0.5 percent, the machinery and electronics rose 0.4 percent, and the cement, and paper and pulp sector closed up 0.3 percent.
(By Frances Huang)