Taipei, Dec. 2 (CNA) Shares in Taiwan closed slightly higher Monday after moving in consolidation mode, as global trade issues continued to dictate market sentiment throughout the session, dealers said.
While local equities remained largely in the doldrums, the dealers said, select large-cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) moved higher, lending support to the broader market and vaulting the market back to the 11,500-point mark by the end of the session.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 13.26 points, or 0.12 percent, at 11,502.83, after moving between 11,454.38 and 11,524.85, on turnover of NT$113.27 billion (US$3.71 billion).
The market opened up 0.18 percent on a technical rebound from a session earlier, when the Taiex closed down 1.1 percent after U.S. President Donald Trump signed a bipartisan bill to support Hong Kong despite a warning from Beijing, the dealers said.
With the Taiex moving to the day's high in the morning session, selling set in to push down the main board into negative territory, before buying in tech heavyweights such as TSMC and iPhone assembler Hon Hai Precision Industry Co. emerged to fend off downward pressure arising from the trade friction between Washington and Beijing, which helped the broader market return into positive territory, they said.
"Market sentiment continued to focus on global trade issues," Concord Securities analyst Kerry Huang said. "Until Washington and Beijing sign their phase-one trade agreement, uncertainty is expected to keep affecting investor sentiment."
"The move by Trump to sign Washington's Hong Kong Human Rights and Democracy Act is expected to increase Washington's bargaining chips during its talks with Beijing," Huang said.
"In addition, the key point during the negotiations is that China has asked the U.S. to reduce its tariffs on Chinese goods."
According to a report posted by China's Global Times newspaper on Sunday, Beijing wants a rollback of tariffs in the phase-one trade deal. The U.S. Trade Representative Office and the Treasury Department did not comment on the issue.
"The local main board continued to move in a narrow range due to the trade issue," Huang said. "Today's thin turnover also reflected a retreat by many foreign institutional investors from the trading floor for the U.S. Thanksgiving holiday, and more will be off the floor ahead of the Christmas season."
According to the TWSE, foreign institutional investors bought a net NT$3.46 billion-worth of shares on the main board Monday.
"The silver lining for today was that buying in select tech giants remained in place, and their strength, in particular in the late trading session, helped the broader market to recoup its earlier losses," Huang said.
TSMC, the most heavily weighted stock in the local market, rose 0.82 percent to close at NT$307.50 after fluctuating between NT$306.50 and NT$308.00, with 23.99 million shares changing hands.
"TSMC is strong in fundamentals but technically speaking, since its shares made a strong showing in recent sessions, the stock could face stiff technical resistance ahead of NT$315.00, which was the Nov. 19 closing high," Huang said.
Among other gaining tech heavyweights, Hon Hai, the second-largest stock in terms of market capitalization, rose 0.11 percent to close at NT$88.60, off a low of NT$86.80, while Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., added 1.80 percent to end at NT$4,515.00.
As the bellwether electronics sector, which closed up 0.21 percent, was highlighted throughout the session, Huang said, old economy and financial stocks generally lost their luster.
Among the mixed old economy stocks, Formosa Chemicals & Fibre Corp. lost 0.34 percent to close at NT$87.00, while Formosa Petrochemical Corp. ended unchanged at NT$96.00 and Formosa Plastics Corp. rose 0.93 percent to end at NT$98.10.
In the financial sector, which closed up 0.02 percent, E. Sun Financial Holding Co. rose 0.74 percent to end at NT$27.25, while Shanghai Commercial & Savings Bank lost 0.70 percent to close at NT$49.55 and Cathay Financial Holding Co. ended down 0.12 percent to end at NT$41.65.
"Investors had better watch closely the general election in the United Kingdom scheduled for next week, the outcome of which could influence Brexit and in turn, the global financial markets," Huang said.