Taiwan shares end up slightly as turnover falls

Taipei, Aug. 13 (CNA) Shares in Taiwan closed slightly higher Tuesday following a reduced turnover amid caution ahead of key U.S. economic data due out later this week.

Because of the lower turnover, many large-cap tech stocks fell into consolidation mode throughout the session. Meanwhile, iPhone assembler Hon Hai Precision Industry Co. attracted bargain hunters which helped boost the broader market.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 23.31 points, or 0.11 percent, at 21,796.57 after moving between 21,698.47 and 21,866.63. Turnover totaled NT$342.75 billion (US$10.58 billion), down from NT$391.31 billion a session earlier.

The market opened at 9 a.m. and rose by 93 points to hit the daily high within five minutes. Selling then set in, pulling the Taiex down by 75 points to the daily low by 9:10 a.m.

The index then continued the session in a narrow range as investors took cues from the lackluster performance of the U.S. markets. The Dow Jones Industrial Average fell 0.36 percent and the tech-heavy Nasdaq index rose 0.21 percent overnight.

Washington is scheduled to release its July consumer price index on Wednesday and its July retail sales and weekly jobless claims on Thursday.

"Inflation data is being carefully watched for more clues about the next move by the U.S. Federal Reserve," equity analyst Andy Hsu said. "More important, weekly jobless claims are also important as investors at home and abroad wait to see whether the U.S. economy is set for a hard landing."

"That's why the Taiex traded in a narrow range as its counterparts in the United States did overnight," Hsu said.

In Taipei, Hsu said, given many investors were waiting for this key data, it was no surprise that turnover shrank and tech heavyweights narrowly fluctuated.

"Fortunately, Hon Hai continued to attract buying, helping the Taiex end above the previous closing level," Hsu said. "Compared with TSMC (Taiwan Semiconductor Manufacturing Co.), Hon Hai remained attractive in terms of valuation."

"In addition, Hon Hai will hold an investor conference on Wednesday. Its gains suggest many believe the company will come up with positive ideas amid the artificial intelligence boom," Hsu said.

Hon Hai, second to TSMC in terms of market capitalization, which also rolls out AI servers, rose 2.84 percent to close at NT$181.00, while TSMC underperformed, up only 0.11 percent to end at NT$941.00 after hitting a high of NT$945.00.

"TSMC's gains were capped at around its 60-day moving average of NT$947.00," Hsu said. "But, it is unlikely the stock will suffer heavy short-term losses as strong technical support is expected to kick in around NT$937.00."

Smartphone IC designer MediaTek Inc. lost 1.28 percent to close at NT$1,160.00, and dynamic random access memory (DRAM) chip supplier Nan Ya Plastics Corp. fell 0.38 percent to end at NT$52.80.

However, silicon intellectual property supplier AIchip Technologies Inc. rose 5.76 percent to close at NT$2,385.00, and eMemory Technology Inc. rose 5.16 percent to end at NT$2,345.00.

Also in the tech sector, Largan Precision Co., a supplier of camera lenses to Apple Inc. rose 2.00 percent to close at NT$2,805.00, and power management solution provider Delta Electronics Inc. ended up 0.13 percent at NT$397.50.

The electronics index rose 0.33 percent with the semiconductor sub-index up 0.12 percent.

"Caution over the U.S. economy also dominated non-tech industries on the local main board throughout the session," Hsu said.

The petrochemical industry lost 2.35 percent as Formosa Petrochemical Corp. shed 3.01 percent to close at NT$61.20 after the stock was removed from the MSCI Global Standard Indexes after a quarterly index review.

In addition, Nan Ya Plastics Corp. fell 3.17 percent to end at NT$45.85, Formosa Chemicals & Fibre Corp. dropped 2.70 percent to close at NT$45.05, and Formosa Plastics Corp. lost 2.22 percent to end at NT$52.80.

In the construction industry, which rose 0.23 percent, boosting gains from a session earlier due to increasing home transactions, Delpha Construction Co. rose 2.73 percent to close at NT$49.00, and Kindom Development Co. gained 1.02 percent to end at NT$59.20.

The financial sector fell 0.49 percent with Mega Financial Holding Co. falling 1.78 percent to close at NT$38.70. Fubon Financial Holding Co., however, increased 0.81 percent to end at NT$87.50. CTBC Financial Holding Co. closed unchanged at NT$34.50.

"The Taiex is expected to experience volatility as it moves closer to 22,000 points, ahead of the technical hurdles at around the 20-day moving average of 22,170," Hsu said. "But any technical pullback could create buying opportunities for fundamentally healthy stocks like TSMC."

Despite the gains of the Taiex, foreign institutional investors sold a net NT$5.09 billion worth of shares on the main board Tuesday, according to the TWSE.