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Taiwan shares end up on mild technical rebound

2019/05/24 17:32:47

Taipei, May 24 (CNA) Shares in Taiwan staged a mild technical rebound Friday after plunging the previous session as the bellwether electronics sector led the broader market higher throughout the session, dealers said.

However, turnover remained moderate to cap the upturn as market sentiment remained roiled by rising trade tensions between the United States and China and uncertainty over Chinese telecom equipment maker Huawei Technologies after a business ban imposed by Washington, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 19.91 points, or 0.19 percent, at 10,328.28, after moving between 10,308.59 and 10,370.97, on turnover of NT$101.47 billion (US$3.22 billion).

The market opened up 4.78 points and rose to the day's high at around 9:30 a.m. as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) bounced back from Thursday's 3.36 percent slump to boost the Taiex, dealers said.

As the main board moved closer to the nearest technical resistance ahead of the 5-day moving average of 10,392 points, some investors shifted to the sell side, which prompted the Taiex to give up part of its earlier gains by the end of the session, dealers added.

"Despite today's gains, the local main board remained in consolidation mode after shares suffered a dive yesterday, making the market technically fragile," Hua Nan Securities analyst Kevin Su said.

On Thursday, the Taiex fell 1.42 percent on the weakness of tech stocks.

"The tech sector as a whole rebounded but the strength was limited as there are no signs that Washington and Beijing will resolve their trade disputes anytime soon, in particular after the business ban faced by Huawei," Su said.

"As many tech firms in Taiwan, including TSMC, are in Huawei's supply chain, worries over their future shipments prevented investors from chasing prices for the moment," he said.

TSMC, the most heavily weighted stock on the local market, rose 1.30 percent to close at NT$233.00, after an early high of NT$234.00, with 35.95 million shares changing hands. TSMC's gains contributed about 30 points to the weighted index and boosted the electronics sector by 0.44 percent.

TSMC said it will continue to supply chips to Huawei since after a preliminary review, the business accords with the company's rules governing compliance management and due diligence for shipments.

Also in the tech sector, integrated circuit packaging and testing services provider ASE Technology Holding Co., a Huawei supplier, rose 0.51 percent to close at NT$58.60 after hitting a high of NT$59.10.

Bucking the upturn of the electronics sector, shares in iPhone assembler Hon Hai Precision Industry Co. fell 0.14 percent to end at NT$71.40, off a high of NT$72.20, and smartphone camera lens supplier Largan Precision Co. lost 0.66 percent to close at NT$3,775.00 after hitting a high of NT$3,935.00.

"Select old economy and financial stocks moved higher to help the broader market stay at the previous closing level," Su said. "I think some investors were willing to park their funds in non-tech stocks as a safe haven amid the current trade friction."

In the property sector, which rose 0.75 percent, shares in Cathay Real Estate Development Co. rose 3.87 percent to close at NT$25.50, Kindom Construction Co. gained 3.77 percent to end at NT$24.75, and Huaku Development Co. added 2.40 percent to close at NT$81.00 on hopes that returning Taiwanese companies will boost demand for property.

Among gaining financial stocks, Shanghai Commercial & Savings Bank rose 5.28 percent to close at NT$57.80, and SinoPac Financial Holding Co. rose 1.67 percent to end at NT$12.20.

"Foreign institutional selling is expected to continue amid global uncertainty so it is possible the local equity market will encounter more volatility down the road," Su said.

According to the TWSE, foreign institutional investors sold a net NT$8.52 billion worth of shares on the main board Friday after net sales of NT$11.02 billion on Thursday.

(By Frances Huang)
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