Taiwan shares end slightly higher ahead of Fed meeting

Taipei, July 30 (CNA) Shares in Taiwan closed slightly higher Tuesday after suffering early losses but sentiment stayed cautious ahead of a two-day policy-making meeting of the U.S. Federal Reserve slated to open later in the day, dealers said.

Bargain hunters rushed to pick up large cap tech stocks in the second half of the session, helping the broader market move into positive territory by the market's close, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 59.08 points, or 0.27 percent, at 22,223.57 after moving between 21,833.85 and 22,276.39. Turnover totaled NT$384.95 billion (US$11.72 billion).

The market opened down 0.54 percent and fell to its low at around 10:30 a.m. in the wake of a lackluster performance on American markets, where the Dow Jones Industrial Average lost 0.12 percent and the tech-heavy Nasdaq index rose 0.07 percent overnight, dealers said.

With the Taiex dipping below the 22,200-point mark, investors who simply wanted to buy on the dip jumped in, focusing on tech heavyweights to help the market rally to the end of the session, dealers said.

"The small fluctuations on the U.S. markets and the initial losses on the local market reflected caution before the Fed's meeting opens," Mega International Investment Services Corp. analyst Alex Huang said.

While investors around the world are expecting the American central bank to leave its key interest rates unchanged this time, "the markets just want some signals from the Fed to judge whether a rate cut cycle will start as early as September," Huang said.

After heavy losses in recent sessions, Huang said, bargain hunters turned active Tuesday. Before Tuesday, the Taiex had shed 867.76 points, or 3.77 percent, since the beginning of this month.

"Big tech stocks such as TSMC (Taiwan Semiconductor Manufacturing Co.) and Hon Hai Precision Industry Co. were the major targets of bargain hunters," Huang said.

"I'm not ruling out the possibility that government-led funds were among the bargain hunters in a bid to vault the Taiex past technical hurdles ahead of the 60-day moving average of 22,274 points when the index was still shy of that today," Huang said.

After recovering from the day's low of NT$926.00, TSMC, the most heavily weighted stock on the local market, finished down 0.40 percent to close at NT$940.00. TSMC's recovery helped the Taiex recover about 113 points by the end of the session.

Also known as Foxconn on the global markets, iPhone assembler Hon Hai, second to TSMC in terms of market value, returned to positive territory, rising 1.55 percent to end at NT$196.00.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 1.21 percent to close at NT$1,255.00, and IC packaging and testing services provider ASE Technology Holding Co. gained 1.30 percent to end at NT$155.50.

Huang said buying in the optoelectronics industry appeared strong, with the sub-index up 2.76 percent, lending additional support to the broader market.

In the industry, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 5.05 percent to close at NT$2,915.00, and flat panel makers AUO Corp. and Innolux Corp. gained 2.25 percent and 3.27 percent, respectively, to end at NT$18.20 and NT$15.80.

"Old economy stocks largely moved in a narrow range but transportation and construction stocks were the exception, attracting solid rotational buying throughout the session," Huang said.

In the transportation industry, which rose 2.10 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 3.09 percent to close at NT$167.00.

Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. added 3.83 percent and 4.53 percent, respectively, to end at NT$62.30 and NT$76.20.

The construction index finished 2.15 percent higher.

King's Town Construction Co. soared 10 percent, the maximum daily increase, to close at NT$102.50, and JSL Construction & Development Co. rose 5.58 percent to end at NT$208.00.

In addition, Huaku Development Co. added 5.26 percent to close at NT$170.00, and Highwealth Construction Corp. ended up 1.75 percent at NT$64.10.

In the financial sector, which underperformed the broader market, finishing down 0.89 percent, Fubon Financial Holding Co. lost 0.80 percent to close at NT$86.50, and Cathay Financial Holding Co. fell 1.59 percent to end at NT$61.70.

China Development Financial Holding Co. resisted the downturn, finishing 0.95 percent higher at NT$16.00.

In addition to the Fed factor, "investors should watch closely how the U.S. markets react to earnings released by tech heavyweights this week as tech stocks in Taiwan will follow suit," Huang said.

Microsoft will report its results on Tuesday, Meta Platforms on Wednesday, and Apple and Amazon on Thursday.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$23.61 billion in shares on the market Tuesday.