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Taiwan shares end up, but gains capped short of 10,500 points

2017/12/13 17:21:10

Taipei, Dec. 13 (CNA) Shares in Taiwan closed moderately higher Wednesday as gains posted by non-high-tech stocks offset losses suffered by the bellwether electronics sector, dealers said.

The broader market's gains were capped, however, because of stiff technical resistance ahead of the 10,500-point mark and cautious sentiment caused by foreign institutional selling in recent sessions, they said.

The weighted index on the Taiwan Stock Exchange ended up 27.42 points, or 0.26 percent, at 10,470.70, after moving between 10,444.70 and 10,489.17, on turnover of NT$102.48 billion (US$3.42 billion).

The market opened up 3.83 points on a slight technical rebound and soon rose to the day's high on market gains overnight in the U.S., where the Dow Jones Industrial Average closed up 0.49 percent and the S&P 500 index ended up 0.15 percent, dealers said.

While old economy and financial stocks move higher along with their counterparts in the U.S. market, the local bellwether electronics sector trended lower after the tech-heavy Nasdaq closed down 0.19 percent, limiting the broader market's gains, they said.

"The momentum of the main board was not strong enough to vault the weighted index past the 10,500-point mark, where there was stiff technical resistance," Mega International Investment Services Corp. analyst Alex Huang said.

"The sluggish electronics sector was the reason for the index's narrow range today. Many investors feared high-tech stocks on Wall Street will face more selling pressure, which could dictate the movement of local electronics stocks," Huang said.

Huang said tech stocks at home and abroad generally have high valuations, and investors are likely to sell their holdings to realize profits before the stocks are bid down to more realistic valuations.

In the local electronics sector, which underperformed the broader market by finishing 0.03 percent lower at the close, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) lost 0.22 percent to close at NT$227.00, with 17.90 million shares changing hands.

Also in the high-tech sector, iPhone and iPad assembler Hon Hai Precision Industry Co. fell 0.43 percent to end at NT$93.70, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., shed 0.68 percent to close at NT$4,400.00.

"It seemed investors were keen to cut their holdings of tech stocks and move their funds into financial and old economy stocks for the time being," Huang said. "But without a strong electronics sector, the market was fairly quiet and had low turnover."

In the financial sector, which rose 0.66 percent, Fubon Financial Holding Co. gained 1.61 percent to close at NT$50.40, and Mega Financial Holding Co. added 1.07 percent to end at NT$23.70.

Among the winning old economy stocks, food brand Uni-President Enterprises Corp. rose 1.24 percent to close at NT$65.50, and Nan Ya Plastics Corp. added 0.54 percent to end at NT$74.60.

"Investors are also looking to see when foreign institutional investors will resume buying after cutting their holdings in recent sessions," Huang said. "Such caution prevented the market from making a breakthrough."

According to the TWSE, foreign institutional investors sold a net NT$1.24 billion in shares on the main board on Wednesday, the 14th consecutive session in which the value of the shares they sold topped that of the shares they bought.

(By Frances Huang)