Taiwan shares end higher on thin turnover

Taipei, Sept. 13 (CNA) Shares in Taiwan closed moderately higher Friday as turnover remained thin ahead of a policymaking meeting scheduled by the U.S. Federal Reserve for next week, dealers said.

While the bellwether electronics sector entered consolidation mode, buying rotated to select old economy stocks such as the petrochemical and transportation industries to support the broader market, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 106.40 points, or 0.49 percent, at 21,759.65 after moving between 21,643.22 and 21,796.39. Turnover totaled NT$243.57 billion (US$7.60 billion), down from NT$316.43 billion on Thursday.

The main board closed up 324.46 points, or 1.51 percent this week.

On Friday, the market opened up 0.47 percent and soon hit the day's high, rising 143.14 points on follow-through buying in the previous session, when the Taiex soared 2.96 percent.

Selling, however, set in with tech stocks in focus to push down the Taiex to negative territory in late morning trading session on profit taking, dealers said.

Select old economy stocks attracted rotational buying serving as an anchor to stabilize the broader market for the rest of the session, while last-ditch interest in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) also helped the main board trade above the previous closing level by the end of the session, dealers said.

"After yesterday's rally, investors turned calm and shifted their attention to the upcoming policymaking meeting of the Fed next week," Concord Capital Management analyst Lu Chin-wei said.

"While the market has widely anticipated the Fed will cut interest rates by 25 basis points this time, investors are waiting for the American central bank's comments for a better guess about the U.S. economy," Lu said.

The Fed's two-day policymaking meeting is slated to open on Sept. 17.

"Amid such caution, with many investors here staying on the sidelines, turnover was low so it was hard for tech heavyweights to make a big move for the moment with the electronics sector simply falling to consolidation," Lu said.

TSMC, the most heavily weighted stock in the local market, rose 0.74 percent to close at NT$947.00 as buying in the last few minutes vaulted the stock into positive territory, off a low of NT$939.00.

TSMC's gains contributed about 57 points to the Taiex's rise Friday and sent the electronics index and semiconductor subindex higher by 0.36 percent and 0.38 percent, respectively.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 2.60 percent to end at NT$1,125.00 and United Microelectronics Corp., a smaller contract chipmaker, shed 1.09 percent to close at NT$54.60.

Application specific integrated circuit (ASIC) designer AIchip Technologies Inc. shed 2.67 percent to end at NT$2,370.00.

"Despite a strong rebound of U.S.-based artificial intelligence chip designer Nvidia Corp. in recent sessions, many investors remained alert over possible volatility faced by the AI giant. It was unsurprising that Taiwan's AI-related stocks appeared mixed," Lu said.

AI server maker Quanta Computer Inc. rose 0.59 percent to close at NT$254.50, and rival Wistron Corp. added 1.71 percent to end at NT$101.00, while Wistron's cloud application subsidiary Wiwynn Corp. lost 1.93 percent to close at NT$1,780.00.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, ended down 0.85 percent at NT$176.00.

"Bargain hunters were looking for targets in the old economy sector to park their funds," Lu said. "Large-cap petrochemical stocks staged a strong rebound in the wake of a spike in international crude oil prices overnight. Their valuations were very low."

In the petrochemical industry, which rose 1.36 percent, Formosa Plastics Corp. gained 4.33 percent to close at NT$46.95 and Formosa Petrochemical Corp. added 4.11 percent to end at NT$50.70.

Formosa Chemicals & Fibre Corp. rose 3.96 percent to close at NT$39.40 and Nan Ya Plastics Corp. ended up 3.47 percent at NT$41.70.

The transportation index rose 1.01 percent on an increase in freight rates due to a possible strike of North America's largest longshoremen's union amid an impasse with port ownership in negotiations in the U.S. East Coast, Lu said.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 1.08 percent to close at NT$186.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 0.65 percent and 1.93 percent, respectively, to end at NT$62.40 and NT$79.20.

Among bulk cargo shippers, Sincere Transport Co. rose 1.39 percent to close at NT$25.60, and U-Ming Marine Transport Corp. added 0.78 percent to end at NT$51.50.

Elsewhere in the old economy sector, King's Town Construction Co. rose 5.70 percent to close at NT$120.50, and Highwealth Construction Corp. ended up 1.96 percent at NT$52.00.

In the financial sector, which rose 0.38 percent, Fubon Financial Holding Co. gained 1.05 percent to close at NT$86.70, and Cathay Financial Holding Co. ended up 0.48 percent at NT$63.20.

"Before the Fed meeting, turnover is expected to stay low," Lu said. "The Taiex still needs some time to digest pressure before challenging technical resistance ahead of the 20-day moving average [of 21,864 points]."

According to the TWSE, foreign institutional investors bought a net NT$2.94 billion worth of shares on the main board Friday.