Taiwan shares rise slightly after volatile session

Taipei, July 9 (CNA) Shares in Taiwan closed slightly higher on Tuesday after significant volatility, with the electronics sector continuing its trend of daily gains.

Market sentiment has turned somewhat nervous following a rally in recent days, as dealers look ahead to congressional testimony scheduled by U.S. Federal Reserve Chair Jerome Powell on Tuesday and Wednesday and the release of June inflation data on Thursday.

The Taiex, the Taiwan Stock Exchange's (TWSE) weighted index, ended up 21.93 points, or 0.09 percent, at 23,900.08 after moving between 23,607,92 and 24,126.66 during the session. Turnover totaled NT$590.68 billion (US$18.17 billion).

The market opened up 10.05 points and soon rose to the day's high, up about 250 points. Supported by local large cap electronics stocks, it breached the 24,100 point mark in the early morning as investors took their cue from a record high posted by the tech-heavy Nasdaq index overnight.

But selling set in, pushing the Taiex down 270 points and falling into negative territory. Then select AI-related tech stocks regained their footing, vaulting the main board back into positive territory by the end of the session.

"In the past few sessions, the Taiex soared almost 1,000 points so today's volatility reflected technical factors," Cathay Futures Consultant analyst Tsai Ming-han said.

Between July 3 and July 8, the main board increased 998.78 points, or 4.27 percent.

"In addition, caution about when the Fed will kick off a rate cut cycle returned to bother investors before Powell's testimony and the June consumer price index (CPI) data," Tsai said.

In the wake of a 1.43 percent increase in its American depositary receipts (ADRs) overnight, chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) led the electronics sector and the broader market to move higher in the early morning session.

TSMC gave up its initial gains to fall below its previous closing level, but buying of the chipmaker's stock strengthened in the late session, driving the Taiex higher by the end of the day's session.

TSMC, the most heavily weighted stock in the local market, rose 0.48 percent to close at NT$1,040.00, coming off a low of NT$1,025.00. TSMC's gains were equivalent to an approximate 40 point rise in the Taiex.

"Investors appeared willing to hunt bargains when TSMC pulled back as they still have embraced high hopes that the company will give positive leads in an investor conference (slated for July 18)," Tsai said, referring to the chipmaker's strength in the AI industry.

In addition to TSMC, smartphone IC designer MediaTek Inc. moved above the previous closing level throughout the session, rising 2.82 percent to end at the day's high of NT$1,460.00.

IC packaging and testing service provider ASE Technology Holding Co. gained 4.35 percent to close at NT$180.00.

AI server maker Quanta Computer Inc. also rose 5.16 percent to end at NT$336.00, while Wistron Corp., another AI server supplier, lost 2.25 percent to close at NT$108.50.

iPhone assembler Hon Hai Precision Industry Co., which has intensified efforts in AI server development, reversed its strong gains of 5.59 percent on Monday, losing 0.44 percent to end at NT$225.00 off a low of NT$220.50.

"The electronics sector dictated the movement of the Taiex, again," Tsai said. "It was no surprise that old economy industries were largely marginalized."

The transportation industry lost 0.97 percent in the session, with China Airlines shedding 2.06 percent to close at NT$23.80, and EVA Airways losing 1.69 percent to end at NT$34.80.

Meanwhile, container cargo shipper Wan Hai Lines Ltd. dropped 1.03 percent to close at NT$77.20, while rival Evergreen Marine Corp. gained 1.42 percent to end at NT$178.00.

Elsewhere in the old economy sector, Formosa Plastics Corp. lost 1.72 percent to close at NT$59.00, and Nan Ya Plastics Corp. fell 1.52 percent to end at NT$48.50.

In addition, Taiwan Cement Corp. dropped 1.73 percent to close at NT$34.00, and Asia Cement Corp. ended down 0.34 percent at NT$44.55.

In the financial sector, which lost 0.29 percent, Cathay Financial Holding Co. lost 0.32 percent to close at NT$62.10, while Fubon Financial Holding Co. ended unchanged at NT$86.00.

"Despite the volatility, the Taiex still ended higher, climbing out of its earlier technical weakness as large tech stocks left their losses behind," Tsai said. "I expect the local main board will continue to rise after the current consolidation."

"The index is expected to see solid technical support ahead of the five-day moving average of 23,605 points," the analyst said.

According to the TWSE, foreign institutional investors sold a net NT$15.86 billion worth of shares on the main board Tuesday.