Taipei, Dec. 8 (CNA) Shares in Taiwan ended higher after the bellwether electronics and financial sectors staged a rebound, but the weighted index still ended the day under 10,400 points, dealers said.
Market sentiment remained cautious as many investors are watching closely to see when foreign institutional investors resume buying, after recent a sell-off that has pushed down many electronics heavyweights sharply, they said.
The weighted index on the Taiwan Stock Exchange closed up 42.86 points, or 0.41 percent, at 10,398.62, after moving between 10,336.26 and 10,419.28 Friday on turnover of NT$129.55 billion (US$4.32 billion).
The market opened up 0.49 percent to vault the weighted index past 10,400 points and rose to the day's high, reflecting a higher U.S. market, where the Dow Jones Industrial Average ended up 0.29 percent and the tech-heavy NASDAQ index closed up 0.54 percent, dealers said.
However, after passing the 10,400 point level, selling quickly set in, dragging the weighted index into negative territory at one point in the mid-morning session, they said.
With select large cap electronics and financial stocks remaining resilient as they attracted bargain hunting, the broader market was able to offset the downward pressure and that helped the weighted index return to the black by the end of the session, they added.
"Despite today's rebound, the gains were not strong enough for the local main board to close above the 10,400 point level, where there was stiff technical resistance," KGI Securities analyst Phil Chu said.
"As with large foreign institutional investors in recent sessions, local investors have turned cautious, watching to see when foreign investors shift to the buy side," Chu said, adding that the moderate turnover was an indication of such caution.
According to the TWSE, foreign institutional investors sold a net NT$2.37 billion worth of local shares on Friday, with aggregate net selling hitting NT$19.78 billion for the week after net sales of NT$44.9 billion a week earlier. "Fortunately, select heavyweights in both the electronics and financial sectors served as an anchor today to stabilize the broader market, which had been hammered by massive foreign institutional selling," Chu said. "But, the momentum of the latest technical rebound was weak."
Among the rising large tech stocks, shares in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, rose 0.22 percent to close at NT$227.00, and integrated circuit designer MediaTek Inc. gained 2.96 percent to end at NT$296.00.
Also in the electronics sector, which rose 0.48 percent, shares in smartphone camera lens supplier Largan Precision Co. added 1.63 percent to close at NT$4,370.00 and PC brand Asustek Computer Inc. rose 1.89 percent to end at NT$270.00, while iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, closed unchanged at NT$93.70.
The financial sector ended up 0.50 percent with shares in Yuanta Financial Holding Co. up 2.59 percent to close at NT$$13.85, Cathay Financial Holding Co. up 1.33 percent to end at NT$53.50 and Fubon Financial Holding Co. up 0.90 percent to close at NT$50.20.
"Many investors preferred to stay on the sidelines before a policymaking meeting scheduled by the U.S. Federal Reserve for next week," Chu said. "While the market widely expects a rate hike by the Fed next week, comments after the meeting could move global markets."
Chu said the local main board could see short term technical support at around 10,300 points.