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Local bourse breaks four-session losing streak

2012/06/27 14:51:27

Taipei, June 27 (CNA) The local bourse ended a four-session losing streak Wednesday to close in positive territory as select high tech stocks, in particular the firms in Apple's supply chain, staged a rebound, dealers said.

The financial sector also attracted buying on expectations that Taiwan and China will conclude negotiations soon and sign an agreement during the next round of high-level cross-Taiwan Strait talks to set up a currency settlement mechanism, they said.

However, turnover remained thin as investors stayed on the sidelines ahead of a two-day summit among the leaders of the European Union, scheduled to kick off later in the week, the ddealers added.

The weighted index closed up 45.08 points or 0.63 percent at 7,183.01, after moving between 7,127.98 and 7,199.32, on turnover of NT$54.39 billion (US$1.82 billion).

The market opened up 3.86 points and moved to the day's low in early trading on follow-through selling from the previous session, the dealers said.

However, as the index moved closer to the nearest support level of around 7,100 points, bargain hunters turned active to pick up Apple concept stocks, which pushed up share prices after the local media reported that the U.S. consumer electronics giant will launch a long-awaited new iPhone model in August, the dealers said.

"It seemed that the market had strong support at around 7,100 points," Hua Nan Securities analyst Stan Chang said. "Investors seized the iPhone 5 reports as a reason to buy."

Local media said Apple is likely to unveil the iPhone 5 in August, a couple of months ahead of schedule, to tap back-to-school buying at the end of the summer vacation.

While component suppliers such as cellphone camera lens suppliers Largan Precision Co. and Genius Electronic Optical Co. will benefit from the strong demand from Apple, Hon Hai Precision Industry Co. is likely to serve as the sole assembler of the iPhone 5, according to the reports.

Largan Precision rose 5.34 percent to close at NT$612.00, while Genius gained 1.50 percent to end at NT$237.50.

Hon Hai Precision, the world's largest contract electronics maker, closed up 0.58 percent at NT$86.50, and casing supplier Catcher Technology ended up 2.08 percent at NT$196.00.

"But market sentiment remained haunted by the European debt problems," Chang said. "Many investors have become cautious before the EU summit, watching closely whether the meeting will come up with further measures to take on the financial crisis."

Chang said that despite the gains, the local bourse encountered strong technical resistance ahead of 7,200 points.

At the end of the session, the financial sector scored the highest gains among the eight major sectors of the market, finishing up 0.96 percent. Mega Financial Holding closed up 3.33 percent at NT$21.70, and Fubon Financial Holding ended up 1.21 percent at NT$29.35.

Machinery and electronics gained 0.66 percent, plastics and chemicals rose 0.51 percent, textiles rose 0.47 percent, cement stocks gained 0.43 percent, and the paper and pulp sector closed up 0.41 percent.

Foodstuffs rose 0.37 percent, and the construction sector closed up 0.12 percent.

(By Frances Huang)