Taiwan shares end up as gains capped ahead of Fed meeting conclusion

Taipei, Dec. 13 (CNA) Shares in Taiwan closed slightly higher Friday with earlier gains eroded amid cautious sentiment before the U.S. Federal Reserve concludes its two-day policymaking meeting later in the day, dealers said.

The bellwether electronics sector served as a driver to the main board, which ended at its highest level in 2023 as buying rotated to highly priced stocks, in particular in the semiconductor industry, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 18.30 points, or 0.10 percent, at 17,468.93 after moving between 17,438.69 and 17,507.92. Turnover totaled NT$314.44 billion (US$9.97 billion).

The market opened down 3.12 points but soon regained its footing, rising 57.29 points to hit the day's high in the early morning session, as investors picked up select electronic heavyweights, taking their cue from a 0.71 percent increase on the tech-heavy Nasdaq index and a 0.70 percent rise on the Philadelphia Semiconductor Index overnight, dealers said.

Technical resistance

However, with the Taiex breaching the 17,500 point mark, technical resistance arose, prompting some investors to shift to the sell side, which compromised the upturn enjoyed by major tech stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), by the end of the session, dealers added.

The electronics index rose 0.42 percent to close at 867.18, off a high of 867.18 with the semiconductor sub-index rising 0.19 percent to end at 404.13, off a high of 404.52, after TSMC, the most heavily weighted stock on the local market, lost 0.17 percent to close at NT$577.00, coming off a high of NT$579.00.

"Yesterday, the Taiex came off a high of 17,528 points, so stiff technical resistance emerged ahead of the 17,500 point mark," Moore Securities Investment Consulting Co. analyst Adam Lin said. "It was no surprise that the main board gave up its earlier gains today after the index breached that level."

"More important, investors appeared reluctant to chase prices before the Fed meeting concludes, as they are anxiously waiting for the American central bank's comments for more clues about when a rate cut cycle will start following recent aggressive rate hikes," Lin said.

Despite profit taking eroding TSMC's gains, Lin said buying emerged, pushing up high-priced semiconductor stocks.

Tech stocks

"With many foreign institutional investors away from the local market for the year-end holiday, local investment trust firms became the major buyers of highly priced semiconductor stocks to lend support to the broader market," Lin said.

Among the gaining semiconductor stocks, high speed IC designer Asmedia Technology Inc. soared 8.49 percent to end at NT$1,725.00, Alchip Technologies Inc., application specific integrated circuit (ASIC) designer, rose 3.69 percent to close at NT$3,650.00, and Global Unichip Corp., TSMC's ASIC design subsidiary, ended up 1.21 percent at NT$1,810.00.

In addition, smartphone IC designer MediaTek Inc., second to TSMC in terms of market value, also rose 1.70 percent to close at NT$955.00.

The PC industry steamed ahead, rising 1.46 percent, led by contract notebook computer maker Inventec Inc., which surged 10 percent, the maximum daily increase, to end at NT$47.00 after media reported the company secured massive orders. Inventec's buying spread to other PC stocks, with PC brand Acer Inc. rising 2.63 percent to close at NT$44.15, and Asustech Computer Inc. gaining 3.69 percent to end at NT$407.50.

Old-economy sectors

"The non-tech sector largely moved in the doldrums amid concerns over the Fed, with the construction industry an exception, as it benefited from rotational buying on its relatively low valuation," Lin said.

In the construction industry, which rose 0.58 percent, shares in Shining Building Business Co. rose 5.24 percent to close at NT$11.05, Kindom Development Co. gained 2.68 percent to end at NT$38.25, Delpha Construction Co. added 2.03 percent to close at NT$35.25, and Crowell Development Corp. ended up 1.06 percent at NT$33.30.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. lost 1.08 percent to close at NT$73.20, and rival Wei Chuan Foods Corp. fell 0.78 percent to end at NT$19.05. In addition, Taiwan Cement Corp. dropped 0.29 percent to close at NT$34.05, while Asia Cement Corp. ended up 0.24 percent at NT$42.25.

Financial stocks

In the financial sector, which lost 0.20 percent, Fubon Financial Holding Co. lost 0.32 percent to close at NT$62.90, and Cathay Financial Holding Co. fell 0.11 percent to end at NT$44.70.

"After the Fed meeting, investors should keep alert over possible volatility on the U.S. markets Friday, when futures and options contracts will be settled on the same day, which is expected to dictate foreign institutional trading on the Taiwan market," Lin said.

According to the TWSE, foreign institutional investors bought a net NT$3.47 billion worth of shares on the main board Wednesday.