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High-tech shares lift local bourse above 7,500 points

2012/04/25 15:06:11

Taipei, April 25 (CNA) The high-tech sector steamed ahead Wednesday, pushing the broader market higher to close above the 7,500 point mark as investors took cues from Apple Inc.'s solid earnings growth for the quarter to March, dealers said.

In particular, firms in the Apple supply chain got a boost from strong sales of the U.S. consumer electronics giant's devices, while buying among local flat panel suppliers emerged after LG Display of South Korea gave an upbeat earnings forecast for the second quarter of this year, the dealers said.

However, turnover remained thin as many investors were reluctant to chase prices amid lingering concern over the possible introduction of a capital gains tax on stock investments, as well as global economic fundamentals, they added.

The weighted index closed up 64.34 points or 0.85 percent at 7,563.18, after moving between 7,525.69 and 7,569.25, on turnover of NT$68.95 billion (US$2.34 billion).

The market opened up 0.73 percent after Apple shares rose more than 7 percent in after-hours trading on Wall Street on the back of its strong results report in which the U.S. company said it doubled its earnings for the last quarter, the dealers said.

Buying also spread to old economy and financial stocks throughout the trading session, but the gains were capped at the end of the session as the index moved closer to the nearest resistance level of 7,600 points, they said.

"Turnover failed to expand in line with the gains in terms of the index, as many investors remained on the sidelines," Grand Cathay Securities analyst Mars Hsu said. "I prefer to view the gains as just a technical rebound after recent corrections," he added.

Hsu said the market benefited from interest in the local high-tech sector with "Apple concept stocks" in focus.

Among the firms in the Apple supply chain, Hon Hai Precision, which assembles iPhones and iPads, rose 2.42 percent to close at NT$106.00, and battery supplier Simplo Technology gained 5.83 percent to end at NT$227.00.

Meanwhile, flat panel makers were boosted by LGD's optimism toward its bottom line, with AU Optronics up 4.09 percent at NT$14.00 and Chimei Innolux up 4.80 percent at NT$13.10.

Hsu said market sentiment remained haunted by worries over the possible capital gains tax on stock investments, adding that many investors were worried that the debt problems in the eurozone will impact the global economic growth.

"Despite today's rebound, the market is still in a consolidation mode and it needs some time before a breakthrough can be expected," Hsu said.

At the end of the session, the machinery and electronics sector had scored the highest gains among the eight major stock categories, finishing up 1.1 percent. Paper and pulp stocks rose 0.9 percent, financials added 0.8 percent, and plastics and chemicals, as well as the construction sector, closed up 0.6 percent.

Textiles added 0.5 percent, and the foodstuff and cement sector closed up 0.3 percent.

Bucking the gains posted by the broader market, smartphone vendor HTC fell 1.67 percent to close at NT$470.50 on proposed lower-than-expected dividend payouts.

(By Frances Huang)