Taiwan shares end up as non-tech stocks lead gains

Taipei, Aug. 26 (CNA) Shares in Taiwan closed moderately higher Monday after giving up most of their earlier gains ahead of stiff technical resistance at around the 60-day moving average of 22,470 points, dealers said.

With gains posted by the bellwether electronics sector eroded, non-tech stocks, in particular in the financial sector, attracted strong buying, preventing the broader market from heading south after a spike in the shares of Shin Kong Financial Holding Co., dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 82.07 points, or 0.37 percent, at 22,240.12 after moving between 22,164.53 and 22,449.45. Turnover totaled NT$346.43 billion (US$10.88 billion).

The market opened up 0.45 percent and rose to the day's high in the early morning session, up almost 300 points at one point, led by large cap electronics stocks, with buying sparked by a 1.47 percent increase on the tech-heavy Nasdaq index and a 2.79 percent rise on the Philadelphia Semiconductor Index on Friday, dealers said.

Dealers added that gains enjoyed by interest rate sensitive tech stocks at home and abroad largely came after U.S. Federal Reserve Chair Jerome Powell said in a speech that "the time has come" to cut interest rates on Friday (U.S. time).

However, selling on the local main board set in as the Taiex moved closer to the 60-day moving average, focusing on tech stocks, while financial stocks and raw material stocks in the non-tech sector maintained their strength, helping the broader market close in positive territory, dealers said.

"Since the Taiex rebounded sharply from the low seen in early August, the main board has seen high technical hurdles ahead of the 60-day moving average," MasterLink Securities analyst Tom Tang said. Before Monday, the index had surged almost 2,500 points or 12.7 percent from the intraday low of 19,662.74 seen on Aug. 6.

"When Powell's dovish comments over the weekend pushed up the electronics sector in the initial stage today, investors rushed to lock in profits built among tech heavyweights," Tang said. "The silver lining was that non-tech stocks appeared resilient led by the financial sector throughout the session."

The financial sector rose 1.93 percent after Shin Kong Financial gained 4.42 percent to close at NT$13.00 in the wake of CTBC Financial Holding Co. announcing on Friday plans to spend NT$14.55 per share in a tender offer to acquire the company in a bid to become the largest financial holding company in terms of assets in Taiwan.

The NT$14.55 price offer beat the NT$11.32 offered on Thursday by Taishin Financial Holding Co. in a stock swap. Taishin Financial rose 3.09 percent to end at NT$20.00, while CTBC Financial closed up 0.15 percent at NT$33.15.

Buying in the financial sector also spread to select larger cap stocks boosting the sector further, Tang said, referring to Cathay Financial Holding Co., which rose 3.90 percent to close at NT$63.90 and Fubon Financial Holding Co., which gained 3.26 percent to end at NT$91.90.

Raw material stocks were boosted by rotational buying on their relatively low valuations, dealers said.

Nan Ya Plastics Corp. rose 1.86 percent to close at NT$46.60, and Formosa Chemicals & Fibre Corp. gained 1.97 percent to end at NT$44.05. In addition, Chung Hwa Pulp Corp. added 1.32 percent to close at NT$19.25, and rival YFY Inc. ended up 2.84 percent at NT$30.80.

"Turnover stayed thin today amid fears over a possible major pullback so the willingness to chase tech heavyweights appeared weak. Instead, investors tended to take profit," Tang said.

The electronics index rose only 0.07 percent to close at 1,187.84, off a high of 1,202.29.

Among tech stocks which lost steam after an earlier upturn, IC packaging and testing services provider ASE Technology Holding Co. fell 1.66 percent to close at NT$148.00, United Microelectronics Corp., No. 2 contract chipmaker in Taiwan, dropped 0.90 percent to end at NT$55.10, and smartphone IC designer MediaTek Inc, closed down 0.82 percent at NT$1,215.00.

Bucking the downturn, the world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, gained 0.11 percent to end at NT$950.00 after rebounding from an earlier low of NT$945.00 in last ditch buying.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, rose 1.11 percent to close at NT$182.00, while AI server maker Quanta Computer Inc. lost 0.36 percent to end at NT$275.00.

After Chinese video game "Black Myth: Wukong" sold 10 million copies worldwide within three days of its debut, strong interest went to graphics processing unit stocks with Asrock Inc. soaring 10 percent, the maximum daily increase, to close at NT$214.50. On the over-the-counter market, Tul Corp. also surged 10 percent to end at NT$75.20.

"While consolidation mode will continue on low turnover, I expect the Taiex to see strong near-term technical support at around the 20-day moving average of 21,800 points," Tang said. "As long as TSMC remains resilient, a plunge on the Taiex is unlikely."

According to the TWSE, foreign institutional investors sold a net NT$5.15 billion worth of shares on the main board Monday.