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Taiwan shares stay flat after recovering from early low

2019/02/22 18:34:39

Taipei, Feb. 22 (CNA) Shares in Taiwan closed little changed Friday, but stayed above the previous closing level after buying emerged late in the trading session to recoup earlier losses, dealers said.

Shrugging off losses suffered by the U.S. markets overnight and resuming buying in the late trading session, local investors have high hopes that the United States and China will strike a deal to resolve their trade disputes during on-going high-level negotiations, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 3.39 points, or 0.03 percent, at the day's high of 10,322.92, off an early low of 10,269.95, on turnover of NT$116.38 billion (US$3.78 billion).

The market opened down 0.10 percent on a mild technical correction from a session earlier, when the Taiex closed up 0.46 percent, as investors initially took their cue from the U.S. markets, where the Dow Jones Industrial Average closed down 0.40 percent and the S&P 500 index ended down 0.35 percent on disappointing economic data, dealers said.

After moving in a narrow range during most of the trading session, some investors shifted to the buy side in the late session, picking up large cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. and Apple Inc's smartphone camera lens supplier Largan Precision Co. to help the broader market end above the previous closing level, they said.

"It seems investors are looking forward to the current trade talks between Washington and Beijing, hoping the two sides will sign memorandums of understanding as international media reports have anticipated," Hua Nan Securities analyst Kevin Su said.

The high-level negotiations were attended by Chinese Vice Premier Liu He and U.S. Trade Representative Robert Lighthizer. U.S. President Donald Trump will meet Liu on Friday, international media reported.

"Optimism toward the talks extended support to the equity market, helping the Taiex come off its early low," Su said.

Su said late trading session buying focused on market heavyweights with shares in TSMC, the most heavily weighted stock on the local market, closing unchanged at the day's high of NT$236.50, bouncing back from an early low of NT$234.00.

"Investors also targeted other tech stocks with healthy bottom lines, hoping they learn from TSMC and issue cash dividends on a quarterly basis," Su said. TSMC announced Wednesday that it will start to give quarterly cash dividends this year.

Among tech stocks, shares in Largan gained 2.53 percent to close at NT$4,255.00, after hitting a low of NT$4,100.00, and integrated circuit designer MediaTek Inc. ended up 1.93 percent at NT$264.00, off a low of NT$259.50.

Su said buying also spread to select old economy stocks to further stabilize the broader market.

Food brand Uni-President Enterprises Corp. gained 1.08 percent to close at the day's high of NT$75.00, off a low of MT$73.80, and Formosa Plastics Corp. added 0.48 percent to end at NT$104.00, off a low of NT$103.00.

In the financial sector, which closed up 0.09 percent, Yuanta Financial Holding gained 1.46 percent to close at NT$17.35, Cathay Financial Holding Co. ended unchanged at NT$45.40, and Fubon Financial Holding Co. fell 0.22 to close at NT$45.00.

"Investors had better keep alert over economic data to be released in Washington next week, which could move the global financial markets," Su said, referring to data on durable goods sales, consumer confidence and manufacturing activity.

According to the TWSE, foreign institutional investors bought a net NT$1.28 billion worth of shares on the main board Friday.

(By Frances Huang)
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