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Taiwan shares end up on Wall Street rebound, but come off high

2018/02/07 17:22:52

CNA file photo

Taipei, Feb. 7 (CNA) Shares in Taiwan closed higher on a technical rebound Wednesday with buying sparked by a rebound on Wall Street overnight, boosting large cap stocks across the board, dealers said.

However, the upturn posted by the main board was capped as market sentiment remains concerned over when the U.S. market will return to stability after its recent volatility, they said.

In addition, ahead of the six-day Lunar New Year holiday, which starts on Feb. 15, many investors have turned cautious and reluctant to retain their holdings amid fears over possible negative developments abroad during the holiday, they added.

The weighted index on the Taiwan Stock Exchange ended up 147.54 points, or 1.42 percent, at 10,551.54, after moving between 10,547.64 and 10,697.82, on turnover of NT$173.54 billion (US$5.94 billion). The main board rebounded from Tuesday's 4.95 percent dive.

The market opened up 143.64 points or 1.38 percent and rose to the day's high with a rise of more than 290 points, in the wake of a strong showing on Wall Street, where the Dow Jones Industrial Average gained 2.33 percent overnight following a 4.6 percent dive on Monday, dealers said.

However, as the Taiex briefly breached stiff technical resistance at around the 120-day moving average of 10,679 points, some investors shifted to the sell side, a move which limited gains by the end of the sessions, they said.

"After the plunge on Tuesday, many investors have cautioned about rising volatility down the road so they just did not want to chase prices for the moment," Concord Securities analyst Kerry Huang said.

"Despite the latest gains posted by the Dow overnight, it remains to be seen when the U.S. market will stabilize. Buying on the local equity market started fading in the late session to cap turnover," Huang said. The market had previously anticipated Wednesday's turnover would reach NT$190 billion.

Tuesday was a choppy session for the Dow, which fell 567.01 points in the early session before rebounding to close up 567.02 points, indicating a more than 1,000 point fluctuation in one session.

Huang said heavyweights across the board drove the upturn on the local main board Wednesday as bargain hunters rushed to pick up shares soon after the market opened, though these stocks fell slightly in the late session.

Shares in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, rose 0.42 percent to close at NT$240.00, after hitting a high of NT$245.50, with 80.03 million shares changing hands.

Also in the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, added 0.90 percent to end at NT$90.00, off a low of NT$91.30.

Shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., gained 6.87 percent to close at NT$3,655.00 after hitting a high of NT$3,760.00, a maximum daily increase of 10 percent.

In the non-high tech sector, Formosa Plastics Corp. rose 4.45 percent to close at NT$101.00, off a high of NT$102.00 and Nan Ya Plastics Corp. added 2.10 percent to end at NT$77.70, off a high of NT$78.80. Shares in Cathay Financial Holding Co. rose 3.74 percent to close at NT$52.70 after hitting NT$53.50.

"It seems some investors did not want to hold their holdings for a possible rally after the Lunar New Year holiday," Huang said. "At a time of volatility in the global markets, caution still dictates market sentiment."

(By Frances Huang)
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