Taipei, May 16 (CNA) Shares in Taiwan closed moderately higher Wednesday as the main board moved in consolidation mode throughout the session, with large cap electronics stocks in the doldrums, dealers said.
Buying in the old economy and financial sectors offset the downturn suffered by high-tech heavyweights as market sentiment remained haunted by a spike in the benchmark 10-year U.S. treasury yield, which dragged down the Dow Jones Industrial Average by almost 200 points overnight, the dealers said.
The weighted index on the Taiwan Stock Exchange, or Taiex, ended up 22.84 points, or 0.21 percent, at 10,897.57, after moving between 10,865.07 and 10,915.74, on turnover of NT$137.64 billion (US$4.60 billion).
The market opened down 1.19 points on follow-through selling from a session earlier, when the Taiex ended down 0.71 percent, but bargain hunting emerged, which pushed up the index to breach 10,900 points at one point before coming off the day's high to enter consolidation mode for the rest of the session, the dealers said.
"Ahead of 10,900 points, there has been stiff technical resistance," Hua Nan Securities analyst Kevin Su said. "It is understandable that it was not easy for the main board to jump over the high hurdles when the weakness of large cap electronics stocks continued."
In the bellwether electronics sector, iPhone assembler Hon Hai Precision Industry Co. extended its losses from Tuesday, down 1.63 percent to close at NT$84.60, with 54.93 million shares changing hands after the company reported disappointing results for the first quarter a day earlier.
Also in the electronics sector, which ended down 0.13 percent, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., fell 0.98 percent to close at NT$4,050.00, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, ended unchanged at NT$230.50.
"Fortunately, buying in the old economy and financial sectors helped the broader market offset selling in tech stocks," Su said. "I guess the buying came largely from government-led funds in a bid to boost the Taiex ahead of May 20," he said, referring to the two-year anniversary of President Tsai Ing-wen's (蔡英文) inauguration.
In the old economy sector, Taiwan Cement Corp. gained 5.52 percent to close at NT$45.90, and Chia Hsin Cement Corp. added 4.15 percent to end at NT$13.80 on the back of rising product prices.
In the wake of higher international crude oil prices, Nan Ya Plastics Corp. rose 1.41 percent to close at NT$86.40, and Formosa Chemicals & Fibre Corp. gained 2.67 percent to end at NT$115.50.
Among the gaining financial stocks, Cathay Financial Holding Co. rose 1.67 percent to close at NT$54.90, and Fubon Financial Holding Co. added 1.95 percent to end at NT$52.20.
"How the local equity market will move is expected to depend on the performance of Wall Street, which has been bothered by higher bond yields," Su said. "Rising interest rates in the U.S. market have imposed negative impact on equity prices."
The 10-year U.S. treasury yield hit 3.09 percent Tuesday, the highest level since 2011.