Taipei, Dec. 6 (CNA) Shares in Taiwan ended slightly higher Friday as investors locked in earlier gains, which eroded an upturn on the main board by the end of the trading session ahead of the nearest technical resistance level, with the index breaching 11,600 points, dealers said.
Market sentiment continued to be dictated by uncertainty over global trade as the United States and China have yet to sign a phase one agreement to resolve their trade disputes, while turnover remained thin, as many foreign institutional investors were away from the trading floor for year-end holidays, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex ended up 14.99 points, or 0.13 percent, at 11,609.64, after moving between 11,577.83 and 11,657.65, on turnover of NT$109.61 billion (US$5.59 billion).
The market opened up 0.39 percent and soon rose to the day's high on follow-through buying from a session earlier, when the Taiex closed up 0.73 percent, but with the Taiex breaching 11,600 points and moving closer to the technical hurdles at around 11,668 points, an intraday high recorded Nov. 6, selling emerged to force the main board to give up its earlier gains, the dealers said.
Profit-taking focused on large-cap stocks in the bellwether electronics sector, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while some investors shifted their attention to select old economy stocks, which played catch-up with their tech counterparts, they said.
"Technically speaking, the local main board has fallen into consolidation mode, in particular ahead of the 11,668-point mark," equity market analyst Andy Hsu said. "So even though the Taiex opened higher today, the willingness to chase prices appeared weak."
"With many foreign institutional investors have stepped away from the local market for the holiday period, turnover continued to fall, making it unlikely that the Taiex will make a breakthrough anytime soon," Hsu said.
Friday's turnover was lower than the average of NT$111.4 billion in the previous five trading sessions, according to Hsu, who said trading volume could shrink further as the holidays approach. "Therefore, as tech heavyweights in the bellwether electronics sector, including TSMC, saw their gains eroded, the broader market simply followed suit," Hsu said.
TSMC, the most heavily weighted stock in the local market, rose 0.32 percent to close at NT$313.00 after coming off a high of NT$316.00, with 17.66 million shares changing hands. In line with TSMC's fluctuations, the bellwether electronics sector ended up 0.13 percent to end at 504.37, off a high of 509.95.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., second behind TSMC in terms of market capitalization, rose 0.67 percent to close at NT$90.50, off a high of NT$90.90.
While its sales for November hit a monthly record high, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell 0.42 percent to end at NT$313.00 after hitting a high of NT$4,755.00.
Outperforming the broader market, stocks of passive electronic components such as multi-layer ceramic capacitors and resistors, attracted buying on tight supply, with Yageo Corp. up 1.93 percent to close at NT$369.00 and rival Walsin Technology Corp. up 2.84 percent to end at NT$181.00.
The dealers said certain old economy stocks benefited from rotational buying throughout the session to provide additional support to the broader market.
Among the gaining old economy stocks, Asia Cement Corp. rose 1.42 percent to close at NT$46.45, food brand Uni-President Enterprises Corp. added 1.25 percent to end at NT$72.70 and Formosa Plastics Corp. grew 0.83 percent to end at NT$97.20.
In the financial sector, which closed down 0.03 percent, Cathay Financial Holding Co. lost 0.60 percent to end at NT$41.25 and Fubon Financial Holding Co. fell 0.11 percent to close at NT$45.45.
"Today's thin turnover also reflected continued concern over the trade friction between Washington and Beijing, as both sides have given mixed signals about their talks," Hsu said.
In addition, Hsu said, investors had better pay close attention to the upcoming November job data in Washington due for release later in the day, which could move U.S. markets.
According to the TWSE, foreign institutional investors bought a net NT$2.75 billion-worth of shares on the main board Friday.