Taipei, Sept. 16 (CNA) Shares in Taiwan closed moderately higher Monday as turnover remained thin and dipped to an over seven-month low ahead of the Mid-Autumn Festival holiday, dealers said.
Due to the low turnover, large-cap tech stocks largely moved in a narrow range throughout the trading session, but buying rotated to the old economy sector, helping the broader market end above the previous closing level, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 90.43 points, or 0.42 percent, at 21,850.08 after moving between 21,736.70 and 21,854.74. Turnover totaled NT$231.42 billion (US$7.26 billion), the lowest level since Jan. 29, when the figure stood at NT$230.46 billion.
The market opened up 0.19 percent on follow through buying from a session earlier, when the Taiex rose 0.49 percent but moved in a see-saw session in the morning before buying increased in the afternoon with select old economy stocks in focus to push up the broader market over the nearest technical resistance ahead of 21,839 points, the 20-day moving average, by the end of the trading, dealers said.
The market will close for the Mid-Autumn Festival holiday on Tuesday.
"Before a holiday, many investors tended to stay cautious and reluctant to jump into the trading floor amid fears over possible negative leads from abroad," said Cathay Futures Consultant analyst Tsai Ming-han. "More importantly, investors preferred to take to the sidelines for now while they wait for the outcome of a policymaking meeting scheduled by the U.S. Federal Reserve for Sept. 17-18."
"It was not surprising that turnover shrank with many tech heavyweights moving in ranged trade, including TSMC (Taiwan Semiconductor Manufacturing Co.)," Tsai said.
After opening at the day's high of NT$952.00, contract chipmaker TSMC, the most heavily weighted stock in the local market, closed unchanged at NT$947.00.
"As long as TSMC fluctuates in a small swing, it is unlikely for the Taiex to climb out of the current consolidation," Tsai said.
Among other semiconductor stocks, communications network IC designer Realtek Semiconductor Corp. plunged 7.51 percent to end at NT$468.00, and United Microelectronics Corp., a smaller contract chipmaker, fell 0.18 percent to close at NT$54.50.
On the other hand, smartphone IC designer MediaTek Inc. rose 0.44 percent to end at NT$1,130.00, and IC packaging and testing services provider ASE Technology Holding Co. gained 4.75 percent to close at NT$154.00 after a U.S. brokerage raised a target price on the stock to NT$180 from NT$172.
"The silver lining was that Hon Hai attracted bargain hunting buying as the stock played catch up with TSMC after lagging behind," Tsai said.
Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co., also known as Foxconn globally, rose 2.84 percent to end at NT$181.00. In addition, flat panel maker Innolux Corp. soared 9.15 percent to close at NT$15.50 on media reports which said ASE may buy the flat screen supplier's facilities in Kaohsiung. Buying also spread to rival AUO Corp., which ended up 4.92 percent at NT$17.05.
"While many tech heavyweights lost their luster, old economy stocks benefited from rotational buying. Today, such interest set sights on raw material stocks such as petrochemical firms," Tsai said. "But I think the gains posted by petrochemical stocks were technical in nature as the market is still suffering a supply glut."
In the petrochemical industry, which rose 1.51 percent, Formosa Chemicals & Fibre Corp. rose 3.17 percent to close at NT$40.65, and Formosa Plastics Corp. gained 2.77 percent to end at NT$48.25. In addition, Nan Ya Plastics Corp. added 1.08 percent to close at NT$42.15, and Taita Chemical Co. ended up 1.56 percent at NT$19.50.
The paper industry rose 2.65 percent with Chung Hwa Pulp Corp. up 5.25 percent to close at NT$21.05, and Shihlin Paper Corp. up 3.67 percent to end at NT$56.50.
Elsewhere in the old economy sector, shipping stocks underperformed with Evergreen Marine Corp., the largest container cargo shipper, down 1.07 percent to close at NT$184.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. down 1.12 percent and 1.14 percent, respectively, to end at NT$61.70 and NT$78.30.
In the financial sector, which rose 0.25 percent, Fubon Financial Holding Co. rose 0.12 percent to close at NT$86.80, while Cathay Financial Holding Co. ended down 0.16 percent at NT$63.10.
"Before the Fed's decision and comments on the economy, the Taiex could continue to move up and down around the 20-day moving average in light trading," Tsai said. "The main board needs turnover hitting NT$350 billion to NT$400 billion to see a big swing staged by TSMC."
Despite the gains in the Taiex, foreign institutional investors sold a net NT$2.05 billion worth of shares on the main board Monday, according to the TWSE.
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