Taipei, Aug. 16 (CNA) The local bourse closed moderately higher Thursday on rotational buying, but stiff technical resistance ahead of 7,500 points kept a cap on gains by the end of the session, dealers said.
Thin turnover showed that investor were cautious about the global economy and corporate second quarter results, while the latest adjustments in MSCI indices failed to give strong hints to investors to trade, the dealers said.
The weighted index closed up 22.47 points, or 0.30 percent, at 7,490.21 after moving between 7,456.40 and 7,515.02 on turnover of NT$78.05 billion (US$2.60 billion).
The market opened up 0.11 percent on a technical rebound from a session earlier and moved to the day's high as buying rotated to select large cap electronics stocks and the construction sector, the dealers said.
After the index breached the 7,500 point mark, however, profit- taking emerged to compromise the early gains amid lingering concerns over the world's economic fundamentals, they said.
"The market has fallen into a consolidation mode after a rally seen last week," Concord Securities analyst Kerry Huang said.
"With many investors staying on the sidelines amid fears of a pullback, it will not be easy for the bourse to jump the technical hurdles ahead of 7,500 points unless turnover expands to NT$85 billion or even more," Huang said.
Huang said buying interest focused on certain electronics heavyweights such as smartphone vendor HTC and touch panel maker TPK Holding, on their relatively low valuations.
HTC rose 2.67 percent to close at NT$250.00 on a technical rebound from a recent slump amid concerns over its earnings outlook, while TPK gained 3.69 percent to end at NT$393.00.
Huang said the revisions in Taiwan's weighting in the MSCI global indices failed to weigh in the movement of the broader market. "The adjustments have been too small to move the whole market," he said.
After a quarterly review, MSCI raised Taiwan's weighing in the MSCI Emerging Markets Index by 0.0017 percentage points, but cut the island's weighting in the MSCI Asia-Pacific Index (excluding Japan) by 0.012 percentage points.
However, bulk carrier First Steamship closed down 2.21 percent at NT$31.00 after the stock was removed from the Taiwan index of the MSCI Global Small Cap Indices.
At the end of the session, the construction sector had scored the highest gains among the eight major stock categories, finishing up 4 percent, as the government is planning to sell some state-owned land, which is expected to boost property developers' land reserves.
Paper and pulp stocks rose 0.6 percent, machinery and electronics added 0.5 percent, and the financial sector closed up 0.3 percent.
Bucking the uptrend of the broader market, cement stocks fell 0.6 percent, and plastics and chemicals lost 0.3 percent, while the foodstuff and textile sectors closed unchanged.
(By Frances Huang)