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Taipei, Aug. 19 (CNA) Shares in Taiwan closed slightly higher Monday following a reduced turnover ahead of the Aug. 22-24 annual economic policy symposium in Jackson Hole, Wyoming, where U.S. Federal Reserve Chair Gerome Powell will speak, dealers said.
The bellwether electronics sector continued to move higher, offsetting losses suffered by many old economy and financial stocks and helping the broader market finish above the previous closing level, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 60.30 points, or 0.27 percent, at 22,409.63 after moving between 22,307.17 and 22,485.91.
Meanwhile, turnover totaled NT$319.19 billion (US$9.97 billion), the lowest level since trading on the stock market resumed on Feb. 15, the first trading session of the Year of the Dragon, after a seven-day break.
The market opened up 10.50 points and follow-up buying increased from a session earlier, when the Taiex soared 2.07 percent, as the electronics sector continued to move ahead in the wake of a 0.24 percent rise on the Dow Jones Industrial Average and a 0.21 percent increase on the tech-heavy Nasdaq index at the end of last week, dealers said.
With the Taiex breaching the 60-day moving average of 22,434 points, some investors shifted to the sell side, reducing the upturn on the main board by the end of the session, dealers added.
"Look at the low turnover. I think it was not easy for large-cap electronics stocks to make a takeoff today, although some still posted gains. Their upturn was capped and the Taiex was subsequently capped," equity market analyst Andy Hsu said.
"The main board faced stiff technical resistance ahead of the 60-day moving average and even higher technical hurdles awaited the index at around the intraday low of 22,465 points on Aug. 1, which prompted many investors to step back from the trading floor," Hsu added.
"In addition, investors have turned cautious ahead of Powell speaking at the central bankers' symposium in Jackson Hole," Hsu said. "Investors have widely anticipated the Fed will begin a rate cut cycle in September as inflation showed signs of moderating, but the issue is how the Fed will carry out the rate cut."
Hsu said the electronics sector continued stabilizing the main board amid cautious sentiment with the electronics index up 0.56 percent.
After its American depositary receipts added 0.33 percent in the U.S. markets on Friday, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock, rose 0.41 percent to close at NT$973.00, off a low of NT$964.00.
TSMC's gains contributed about 32 points to the Taiex rise and sent the semiconductor sub-index up 0.63 percent.
iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, rose 1.63 percent to end at NT$187.00.
TSMC's buying spread to other semiconductor stocks with smartphone IC designer MediaTek Inc. up 2.03 percent to close at NT$1,255.00, and United Microelectronics Corp. (UMC), a smaller contract chipmaker, up 0.36 percent to end at NT$56.00.
In addition, Novatek Microelectronics Corp., UMC's display IC design subsidiary rose 2.63 percent to close at NT$547.00, while application-specific integrated circuit (ASIC) designer Alchip Technologies Ltd. ended unchanged at NT$2,475.00.
Also in the tech sector, AI server maker Quanta Computer Inc. lost 0.18 percent to close at NT$278.00, and rival Wistron Corp. ended down 1.95 percent at NT$100.50.
"With stiff technical ahead, many investors also refrained from buying non-tech stocks," Hsu said. "However, the construction industry outperformed the broader market amid rising housing transactions."
The construction industry rose 1.11 percent following hopes that property developers would see huge sales in the second half of the year.
Hwang Chang General Contractor Co. and King's Town Construction Co. surged 10 percent, the maximum daily increase, to close at NT$70.10 and NT$136.00. In addition, Shining Building Business Co. gained 3.79 percent to end at NT$16.95, and Chong Hong Construction Co. added 3.49 percent to close at NT$133.50.
Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. lost 0.86 percent to close at NT$80.50, and rival Wei Chuan Foods Corp. ended down 0.27 percent at NT$18.15.
Meanwhile, Formosa Plastics Corp. fell 0.38 percent to close at NT$52.20, and Nan Ya Plastics Corp. ended 0.32 percent lower at NT$46.40.
In the financial sector, which lost 0.87 percent, Cathay Financial Holding Co. dropped 1.11 percent to close at NT$62.30, and Fubon Financial Holding Co. shed 2.60 percent to end at NT$90.00, while Cathay Financial Holding Co. fell 1.11 percent to end at NT$62.30.
"The Taiex is expected to move in a narrow range before Powell's comments," Hsu said. "The main board could see strong technical support ahead of 21,900 points in the short term."
Despite the Taiex gains, foreign institutional investors sold a net NT$3.45 billion worth of shares on the main board Monday, according to the TWSE.
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