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Taiwan shares end up on technical rebound

2018/12/19 18:30:38

CNA file photo

Taipei, Dec. 19 (CNA) Shares in Taiwan moved higher Wednesday on a technical rebound after slumping a session earlier as investors were relieved by the stabilization of U.S. markets overnight, dealers said.

The bellwether electronics sector drove the gains, led by large cap tech stocks, but turnover remained thin as investors were cautious ahead of the conclusion of a two-day policy-making meeting of the U.S. Federal Reserve, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 64.39 points, or 0.66 percent, at the day's high of 9,783.21, off an early low of 9,720.92, on turnover of NT$88.31 billion (US$2.87 billion).

On Tuesday, the main board closed down 0.70 percent.

The market opened up 2.10 points on a rebound on Wall Street, where the Dow Jones Industrial Average closed up 0.35 percent overnight after a plunge of about 1,000 points in the previous two trading sessions, dealers said.

Bargain-hunting then picked up, especially late in the session, and targeted tech heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and select petrochemical and financial stocks to push the Taiex to the day's high at the close, they said.

"Today's gains were technical in nature as market sentiment remained cautious before the Fed delivers its decision," Hua Nan Securities analyst Kevin Su said.

"Investors are eager to see what the Fed will say about the economy after the meeting to get an indication about rate hikes by the Fed next year," Su said.

The consensus was that the Fed will raise its key interest rates at its current meeting.

Wednesday's turnover also remained thin because many foreign institutional investors are away for the Christmas and New Year holiday.

"Without active participation by foreign institutional investors, the market remained in consolidation mode," Su said, referring to a range between 9,600 and 10,000 points.

Su said bargain hunters rushed to pick up large cap stocks in the electronics sector by taking advantage of the sector's relatively low valuations, especially late in the trading day.

Among the gaining tech heavyweights, TSMC, the most heavily weighted stock in Taiwan, rose 1.35 percent to close at the day's high of NT$225.50 with 23.40 million shares changing hands.

Also in the tech sector, which ended up 0.92 percent, iPhone assembler Hon Hai Precision Industry Co. added 1.41 percent to close at the day's high of NT$71.80, and Largan Precision Co., a supplier of smartphone camera lenses to Apple, gained 2.15 percent to end at NT$3,320.00.

Non-tech stocks also benefited from the late buying spree, giving an additional boost to the broader market, Su said.

Among the old economy stocks, Formosa Plastics Corp. rose 1.33 percent to close at NT$99.30, and Nan Ya Plastics Corp. gained 1.22 percent to end at NT$74.40 despite a fall in international crude oil prices overnight.

LCY Chemical Corp. closed 2.73 percent higher at NT$52.70 after the Investment Commission approved a deal for U.S.-based investment firm KKR & Co. to acquire the company.

In the financial sector, which closed up 0.50 percent, Yuanta Financial Holding Co. rose 0.98 percent to end at NT$15.40, and SinoPac Financial Holding Co. added 1.98 percent to close at NT$10.30.

Cathay Financial Holding Co. rose 0.11 percent to end at NT$47.25, and Fubon Financial Holding Co. gained 0.53 percent to close at NT$47.30.

According to the TWSE, foreign institutional investors bought a net NT$3.20 billion in shares on the market Wednesday.

(By Frances Huang)