Taipei, Nov. 14 (CNA) Shares in Taiwan ended slightly higher after moving in a narrow range Wednesday with no new incentives motivating investors to trade ahead of upcoming local government elections scheduled for Nov. 24, dealers said.
Concerns over trade disputes between the United States and China remained, while international media reported that the two top economies in the world have resumed talks before U.S. President Donald Trump and Chinese President Xi Jinping meet at the G20 meeting in Argentina later this month, they said.
Index provider MSCI Inc. lowered Taiwan's weighting in three of its indexes after a semi-annual index review, but the local main board response was muted, closing above the previous closing level, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex closed up 16.04 points, or 0.16 percent, at 9,791.88, after moving between 9,763.89 and 9,823.25, on turnover of NT$101.86 billion (US$3.30 billion).
The market opened up 0.24 percent in a technical rebound from the previous session, when the Taiex closed down 0.56 percent, and continued to move within a small range with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) moving higher to offset the losses suffered by other tech stocks as well as old economy stocks, dealers said.
"Despite the gains, the local main board faces strong technical resistance ahead of the 5-day moving average at around 9,835 points and the 10-day moving average of around 9,855," Mega International Investment Services Corp. analyst Alex Huang said.
"Without any new incentives to encourage investors to trade, the local equity market remained in consolidation mode throughout the session," Huang said, referring to the mixed U.S. markets overnight.
The silver lining was that TSMC, the most heavily weighted stock on the local market, remained in positive territory during the session, helping the Taiex fend off the downward pressure faced by other tech stocks and even non-tech stocks, Huang said.
"I suspect buying in TSMC partly came from government-led funds before the Nov. 24 elections to keep the Taiex from falling," Huang said. "The elections have created uncertainty over the market so many investors are reluctant to trade or even keep their holdings for the moment."
TSMC, which is believed to serve as the sole processor supplier to Apple Inc. for new iPhone production, gained 0.44 percent to close at NT$228.50 with 20.01 million shares changing hands, while iPhone assembler Hon Hai Precision Industry Co. fell 1.48 percent to end at NT$73.30.
Shares in Largan Precision Co., a smartphone camera lens supplier to Apple, lost 0.31 percent to close at NT$3,190.00 and integrated circuit designer MediaTek Inc. shed 0.43 percent to end at NT$230.00.
In the old economy sector, China Steel Corp., the largest steel maker in Taiwan, fell 0.62 percent to close at NT$24.10, shares in food brand Uni-President Enterprises Corp. dropped 0.93 percent to end at NT$74.30, and Formosa Petrochemical Corp. shed 1.77 percent to close at NT$111.00.
In the financial sector, which ended up 0.50 percent, shares in Fubon Financial Holding Co. rose 0.39 percent to close at NT$51.20, and Cathay Financial Holding Co. gained 0.40 percent to end at NT$50.40.
"While Trump and Xi will meet at the G20 meeting, few in the market anticipate any quick improvement in trade ties between the two economies," Huang said. "Fears are rising that the trade friction will affect global demand and impact the global economy next year."
Before the market opened, MSCI announced that it had cut Taiwan's weighting in the MSCI Emerging Markets Index, the MSCI All-Country Asia ex-Japan Index and the MSCI All-Country World Index. The adjustments will take effect after the market closes on Nov. 30.
"Today's reaction to the cut was subdued. But, downward pressure could emerge on the last trading session right before the cut goes into effect as passive funds adjust their portfolios based on the index changes ," Huang said.
(By Frances Huang)
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