Taiwan shares edge higher ahead of U.S. job data

Taipei, July 5 (CNA) Taiwan's stock market closed slightly higher on Friday following a surge a session earlier, amid caution ahead of the release of U.S. job data for June, dealers said.

The Taiex, the weighted index of the Taiwan Stock Exchange (TWSE), ended up 34.06 points, or 0.14 percent, at 23,556.59 after moving between 23,491.79 and 23,628.86 during the trading session. Turnover totaled NT$483.15 billion (US$14.89 billion).

The market began trading up 9.48 points and quickly rose to the day's high, up about 106 points in the early morning session on follow-through buying from Thursday, when the Taiex rose 1.51 percent.

But the market then saw an erosion of most of its earlier gains and a small range of fluctuations continued for the rest of the session.

According to Adam Lin from Moore Securities Investment Consulting Co., "many investors turned calm today" following a "hilarious" session on Thursday that saw significant gains.

"It seemed that caution set in with the U.S. June non-farm payroll data due later in the day as investors needed more clues to guess when the Fed will kick off a rate cut cycle," he added. Monthly job data is one of the indicators the U.S. Federal Reserve uses to evaluate its monetary policy.

TSMC

Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, "took a breather" on Friday following a 2.66 percent jump on Thursday, pushing the broader market into consolidation mode, Lin said.

The chipmaker closed unchanged at NT$1,005.00 Friday after fluctuating between NT$1,000.00 and NT$1,010.00. The stock ended above the NT$1,000.00 mark for the first time in its history to close at NT$1,005.00 on Thursday.

"TSMC has scheduled an investor conference for July 18.," Lin explained. "Before this meeting, high hopes about its business outlook for the third quarter are expected to help the stock trade above NT$1,000.00."

"As long as TSMC is able to sustain its strength, I do not worry about the Taiex," Lin added.

Tech stocks

In addition, iPhone assembler Hon Hai Precision Industry Co., second only to TSMC in terms of market value, also ended unchanged at NT$214.50 after moving between NT$214.00 and NT$215.50. On Thursday, the stock had surged 5.67 percent.

The performance of other semiconductor heavyweights was mixed, dealers said.

Among them, IC packaging and testing services provider ASE Technology Holding Co. rose 1.98 percent to close at NT$128.50, and Scientech Corp., a supplier of production equipment to TSMC, soared 10 percent, the maximum daily increase, to end at NT$451.50.

However, United Microelectronics Corp., a smaller contract chipmaker, fell 0.93 percent to end at NT$53.50, while smartphone IC designer MediaTek Inc. fell 1.82 percent to close at NT$1,350.00.

At the same time, the optoelectronics industry rose 1.82 percent, playing catch-up with its semiconductor counterpart, providing some support to the broader electronics sector, which rose 0.24 percent.

Among optoelectronics enterprises, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 1.94 percent to close at NT$2,895.00, and flat panel makers AUO Corp. and Innolux Corp. gained 2.50 percent and 1.34 percent, respectively, to end at NT$18.45 and NT$15.10.

Financial, old economy stocks

The financial sector also experienced slight gains of 0.30 percent, offsetting the weak performance of many semiconductor enterprises, dealers said.

Fubon Financial Holding Co. rose 1.43 percent to close at NT$84.90, Cathay Financial Holding Co. gained 0.99 percent to end at NT$61.30 and CTBC Financial Holding Co. added 0.75 percent to close at NT$40.04, while Shin Kong Financial Holding Co. shed 2.40 percent to end at NT$10.15.

"Old economy stocks largely came in line with the broader market with sentiment cautious ahead of the U.S. job data," Lin said.

The food index rose 0.23 percent with Uni-President Enterprises Corp. remained unchanged at NT$84.90, while Wei Chuan Foods Corp. rose 0.54 percent to end at NT$18.75.

The textile index gained 0.18 percent after Far Eastern New Century Corp. fell 1.97 percent to close at NT$37.25, while Eclat Textile Co. ended up 2.29 percent at NT$536.00.

"Due to the current caution toward the U.S. monetary policy, investors appeared reluctant to react positively to an increase in freight rates for the moment so shipping stocks suffered," Lin suggested.

In the transportation industry, which fell 1.82 percent overall, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, fell 2.39 percent to close at NT$184.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. lost 2.03 percent and 3.12 percent to end at NT$72.30 and NT$83.70, respectively.

Looking forward

"Investors should remain vigilant over how the U.S. markets will respond to the job data later in the day, since this is expected to affect other markets, including Taiwan's," Lin said.

"Moreover, listed companies are scheduled to report their June sales (by the end of July 10) and the data could impact individual stocks," Lin added.

According to the TWSE, foreign institutional investors sold shares worth a net of NT$6.67 billion on the main board on Friday.