Taiwan shares end up but gains capped

Taipei, Sept. 6 (CNA) Shares in Taiwan closed higher Friday, but gains were limited by the nearest technical resistance level ahead of the 10,800-point mark, while market sentiment improved to some extent due to reduced concerns over trade friction between the United States and China, dealers said.

The bellwether electronics sector, as well as the financial sector, served as anchors to stabilize the broader market amid profit taking, while old economy stocks appeared mixed throughout the session, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 23.71 points, or 0.22 percent, at 10,780.64, after moving between 10,753,45 and 10,803,07, on turnover of NT$130.18 billion (US$4.16 billion).

The market opened up 0.25 percent on follow-through buying from a session earlier, when the Taiex closed up 0.93 percent, and buying continued in the wake of a strong showing on the U.S. markets.

In the U.S., the Dow Jones Industrial Average closed up 1.42 percent and the tech-heavy Nasdaq index ended up 1.75 percent after Washington and Beijing agreed to resume talks in October to resolve their trade dispute, the dealers said.

Buying in select large-cap tech stocks, as well as certain financial stocks, helped the broader market to breach the 10,800-point mark on the local main board at one point before some investors moved to the sell side to take profit, which limited the upturn by the end of the session, the dealers added.

"Yesterday, Taipei and other regional markets reacted favorably to the positive leads from the agreement to resume trade talks between the U.S. and China ahead of Wall Street's rally," Hua Nan Securities analyst Kevin Su said. "So today, the local equity market was calm, with some profit-taking capping the gains."

Su said large-cap electronics stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), continued an uptrend on the back of hopes of the peak season effect before their gains were eroded to some extent.

TSMC, the most heavily weighted stock in the local market, rose 0.19 percent to close at NT$263.50, after hitting an early high of NT$265.00, with 25.36 million shares changing hands.

Buying in TSMC spread to other semiconductor stocks, with integrated circuit designer MediaTek Inc. up 1.90 percent to end at NT$374.50 amid optimism toward its efforts in 5G technology development.

Meanwhile, DRAM chipmaker Nanya Technology Corp. rose 0.26 percent to close at NT$77.10 and rival Winbond Electronics Inc. gained 1.67 percent to end at NT$18.30.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. added 0.13 percent to close at NT$75.00 after its sales hit their highest-ever August level, while Largan Precision Co., a smartphone camera lens supplier, fell 1.24 percent to end at NT$3,980.00 after giving up its earlier gains, which had resulted from its strong August revenue report.

Su said the financial sector attracted buying to further stabilize the market, with Shanghai Commercial & Savings Bank up 3.90 percent to close at NT$53.30.

"The bank has relatively high exposure in Hong Kong. So since the Hong Kong government announced earlier this week the withdrawal of the controversial extradition bill, this banking stock became favored by investors," Su said.

Among other gaining financial stocks, Cathay Financial Holding Co. rose 0.74 percent to close at NT$40.80 and Mega Financial Holding Co. added 0.88 percent to end at NT$28.80.

In the mixed old economy sector, Taiwan Cement Corp. rose 2.18 percent to close at NT$439.85, while food brand Uni-President Enterprises Corp. lost 0.52 percent to end at NT$477.10.

"Despite the profit-taking, the local main board remains technically healthy, with the nearest technical support level at around 10,671 points," Su said.

"However, uncertainty over global trade issues remains, since few can be sure whether Washington and Beijing will strike an agreement in the upcoming talks," Su said. "We will have to watch closely how the trade disputes will affect Wall Street, which will in turn move other markets, including Taiwan."

According to the TWSE, foreign institutional investors bought a net NT$9.26 billion-worth of shares on the main board Friday.