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Taiwan shares recoup earlier losses, end slightly higher

2019/01/22 18:04:44

Taipei, Jan. 22 (CNA) Shares in Taiwan closed slightly higher Tuesday after recouping earlier losses with late session buying focusing on select heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.

Turnover remained in a narrow range amid rising concerns over economic fundamentals after Taiwan reported Monday a more than 10 percent year-on-year decline in export orders for December, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 5.26 points, or 0.05 percent, at 9,894.66, after moving between 9,855.47 and 9,894.66, on turnover of NT$77.17 billion (US$2.5 billion). Tuesday's trading volume fell from NT$93.90 billion a session earlier.

The market opened down 8.86 percent and fluctuated in a small range below the previous closing level for most of the session on a mild technical correction from a day earlier, when the Taiex ended up 0.54 percent, dealers said.

Buying emerged in the last few minutes of the session as bargain hunters picked up select large cap stocks such as TSMC, Formosa Plastics Corp. and Cathay Financial Holding Co., helping the main board recover from the earlier losses and end the day in positive territory, they said.

"It was a quiet day with turnover falling partly because Wall Street closed overnight (the Martin Luther King Jr. holiday), providing no direction to investors here," Mega International Investment Services Corp. analyst Alex Huang.

"More important, many investors stayed on the sidelines as they have turned more cautious about the economy after disappointing export order data for December amid trade tension between the United States and China," Huang said.

After the 10.5 percent year-on-year decline in December, the Ministry of Economic Affairs forecast Monday that export orders could fall another 11.8-14.1 percent year-on-year in January as the global economy slows.

"The silver lining was that some investors were still willing to hunt bargains to buy into stocks, like TSMC, which came under pressure after lower than expected sales guidance for the first quarter to lend support to the broader market," Huang said. "It seems that these negative leads had been digested."

TSMC, the most heavily weighted stock on the local market, rose 0.90 percent to close at the day's high of NT$223.00, off an early low of NT$219.00, with 28.91 million shares changing hands.

The chipmaker said last week that its sales for the first quarter could fall 22 percent from a quarter earlier due to inventory adjustments on weakening demand, which was worse than an earlier market estimate of 10-20 percent.

"Bargain hunting drove TSMC higher, but the stock could encounter stiff technical resistance when it moves closer to NT$230-NT$235," Huang said.

Also in the bellwether electronics sector, PC brand Asustek Computer Inc. closed unchanged at NT$230.00, but rose from an earlier low of NT$227.00, while iPhone assembler Hon Hai Precision Industry Co. fell 0.70 percent to close at NT$70.70 after hitting a low of NT$70.30.

Non-electronics stocks also saw support from the last ditch buying with Formosa Plastics gaining 0.49 percent to close at NT$103.00, off an early low of NT$102.00, and Nan Ya Plastics Corp. adding 0.53 percent to end at NT$76.40, off a low of NT$75.90.

In the financial sector, which closed up 0.25 percent, shares in Cathay Financial rose 0.91 percent to close at NT$44.20, and CTBC Financial Holding Co. gained NT$1.23 percent to end at the day's high of NT$20.50.

"The current earnings season in Taiwan and on Wall Street still dictated market sentiment here," Huang said. "After TSMC's results last week, investors are anxiously waiting for Apple Inc's (scheduled for Jan. 29)."

"Investors should keep alert over the upcoming new round of trade talks between Washington and China at the end of this month, which could move the global financial markets," Huang added.

According to the TWSE, foreign institutional investors bought a net NT$1.19 billion worth of shares on the main board Tuesday.

(By Frances Huang)