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Local bourse on technical rebound, but capped before 7,800 points

2012/09/21 14:58:44

Taipei, Sept. 21 (CNA) The local bourse staged a mild technical rebound Friday as stiff technical resistance ahead of the 7,800 point mark limited the upside in market movement, dealers said.

Driven by ample liquidity, select large cap high-tech stocks attracted buying to give the market a boost, while some firms in the Apple supply chain moved higher after iPhone 5, the newest version of Apple's smartphone went on sale in a number of countries, they said.

The weighted index closed up 27.04 points, or 0.34 percent, at 7,754.59, after moving between 7,737.03 and 7,765.01, on turnover of NT$83.27 billion (US$2.84 billion).

The market opened up 0.46 percent and moved to the day's high on a technical rebound from a slump seen in an earlier session, but as the index moved closer to 7,800 points, profit taking emerged to cap the gains by the end of the session, dealers said.

"The market has fallen into a ranged movement after a recent strong showing on the Fed Reserve's third round of quantitative easing," Hua Nan Securities analyst Stan Chang said.

Chang said after further stimulus measures from the U.S. central bank, market attention shifted back to economic fundamentals with many investors watching closely when and how the economy will make a turnaround.

"So, amid lingering uncertainty over the economy, the market needs some time to consolidate before making a takeoff," Chang said.

Among the winning high-tech stocks, flat panel maker AU Optronics rose 5.05 percent to close at NT$11.45 after a court in the U.S. handed down a smaller-than-expected criminal fine for the company's role in a price-fixing conspiracy.

In the Apple supply chain, Hon Hai Precision Industry, the world's largest contract electronics maker, gained 0.83 percent to end at NT$96.80, and Cheng Uei Precision Industry ended up 1.43 percent at NT$71.00 on the debut of iPhone 5.

"It is unlikely for the market to suffer a major setback on the back of high liquidity after further fund inflows," Chang said. "Many investors tend to seek stocks with positive leads."

In addition to select electronics stocks, cement shares attracted buying on hopes that China will come up with plans to improve infrastructure, a move expected to lift demand for cement, Chang said.

In the cement sector, Taiwan Cement rose 1.84 percent to close at NT$35.90, and Asia Cement gained 2.32 percent to end at NT$37.45.

At the end of the session, the cement sector scored the highest gains among the eight major sectors of the market, finishing up 1.9 percent. Paper and pulp stocks rose 0.9 percent, and textiles added 0.6 percent.

The construction, and machinery and electronics sectors gained 0.5 percent, plastics and chemicals rose 0.3 percent, and financials and foodstuffs closed up 0.2 percent.

(By Frances Huang)