Taiwan shares edge higher ahead of U.S. inflation data

Taipei, Aug. 12 (CNA) Shares in Taiwan closed slightly higher Tuesday after moving in a narrow range in the wake of a lackluster performance on U.S. markets overnight, as investors waited for the release of U.S. July consumer price index data and clues about the Federal Reserve's next move, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 22.86 points, or 0.09 percent, at 24,158.36 after moving between 24,065.43 and 24,263.92. Turnover totaled NT$420.04 billion (US$14.01 billion).

"Despite the gains on the Taiex, the local main board stayed in consolidation mode," Moore Securities Investment Consulting Co. Adam Lin said. "Upcoming inflation data still dictates market movements at home and abroad." Overnight, the Dow Jones Industrial Average lost 0.45 percent with the tech-heavy Nasdaq index down 0.30 percent.

However, optimism over a possible rate cut by the Fed in September remains in place given weaker-than-expected July job data, Lin said.

While market attention still focused on the bellwether electronics sector, "buying rotated out of large-cap stocks such as chipmaker TSMC (Taiwan Semiconductor Manufacturing Co.) and iPhone assembler Hon Hai Precision Industry Co. to keep the main board in a narrow range."

TSMC, the most heavily weighted local stock, closed unchanged at NT$1,180.00 after coming of a high of NT$1,190.00 and the stock's fall from the day's high cost the Taiex about 80 points. Hon Hai, second to TSMC in terms of market capitalization, lost 0.51 percent to end at NT$197.00.

However, smartphone IC designer MediaTek Inc. rose 0.37 percent to close at NT$1,360.00, and United Microelectronics Corp., a smaller contract chipmaker, added 0.62 percent to end at NT$40.65.

Buying appeared more visible among other electronics stocks with printed circuit board maker Gold Circuit Electronics Ltd. rising 4.65 percent to close at NT$401.00 and TSMC engineering construction services provider United Integrated Services Co. growing 1.55 percent to end at NT$985.00, Lin said.

Shares in the four major entities under the conglomerate Formosa Plastics Group continued rising and their relatively large weighting helped to stabilize the broader market, Lin said.

Nan Ya Plastics Corp. rose 3.89 percent to close at NT$41.40 as investors are upbeat about the company's supplies of raw materials used in printed circuit board production.

Nan Ya Plastics buying also spread to its three affiliates due to their cross shareholding: Formosa Plastics Corp. rose 3.25 percent to close at NT$39.70, Formosa Petrochemical Corp. gained 4.15 percent to close at NT$41.45, and Formosa Chemicals & Fibre Corp. ended up 4.29 percent at NT$29.20, Lin said.

Elsewhere in the old economy sector, China Steel Corp., the largest steel maker in Taiwan, rose 0.78 percent to close at NT$19.50, while Tung Ho Steel Corp. lost 0.31 percent to end at NT$64.50.

In the financial sector, Fubon Financial Holding Co. rose 0.58 percent to close at NT$86.70, while Cathay Financial Holding Co. ended down 0.47 percent at NT$63.60.

"The current AI boom is expected to continue to provide support to the Taiex," Lin said. "I expect the index will continue to move higher and challenge 24,416 points, the intraday high of July 11, 2024."

According to the TWSE, foreign institutional investors sold a net NT$6.63 billion worth of shares on the main board Tuesday.