Taiwan shares see gains eroded ahead of index benchmark

Taipei, Nov. 12 (CNA) Shares in Taiwan closed higher Wednesday but came off the day's high on heavy technical pressure ahead of 28,000 points as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) failed to sustain its initial gains, dealers said.

The Taiex, the Taiwan Stock Exchange's weighted index, ended up 162.14 points, or 0.58 percent, at 27,947.09 after moving between 27,799.92 and 28,071.76. Turnover totaled NT$560.51 billion (US$18.08 billion).

"It was the fourth consecutive session that the Taiex failed to closed above 28,000 points," Mega International Investment Services analyst Alex Huang said.

"Technical hurdles ahead of that level appeared high and consolidation is needed to absorb the pressure after a recent strong showing."

The market rose by noon led by TSMC, which attracted buying after the company announced it would pay a cash dividend of NT$6 per share on its third quarter earnings, up from NT$5 for the second quarter, Huang said.

"But, profit taking followed to erode TSMC's and the Taiex's initial gains amid lingering concerns over tech stocks' stretched valuations over the past few months," Huang said.

TSMC, which accounts for over 40 percent of the Taiex's market value, rose 0.68 percent to close at NT$1,475.00, off a high of NT$1,485.00. Its fall from the day's high cost the Taiex about 80 points.

Other semiconductor stocks appeared mixed. Smartphone IC designer MediaTek Inc. rose 0.40 percent to end at NT$1,245.00, but IC packaging and testing services provider ASE Technology Holding Co. fell 0.44 percent to close at NT$277.00.

Of note, memory chip supplier Transcend Information, Inc. soared 10 percent, the maximum daily increase, to end at NT$196.50 on a supply shortage.

Before its investor conference, AI server maker and iPhone assembler Hon Hai Precision Industry Co. rose 1.83 percent to close at NT$251.00, while Quanta Computer Inc., another AI server producer, lost 1.20 percent to end at NT$288.00.

The non-tech sector provided additional support to the broader market led by petrochemical stocks after Nan Ya Plastics Corp. turned a profit in the third quarter, Huang said.

Nan Ya Plastics surged 10 percent to close at NT$49.80, and the buying spread to its affiliates under the Formosa Plastics Group.

Formosa Chemicals & Fibre Corp. gained 5.54 percent to end at NT$32.40, Formosa Petrochemical Corp. rose 5.33 percent to close at NT$55.30, and Formosa Plastics Corp. closed 3.63 percent higher at NT$41.35.

"But, Nan Ya Plastics' improved bottom line largely resulted from its non-core business investments. The global petrochemical market remains weak due to a supply glut," Huang said.

In the financial sector, Fubon Financial Holding Co. rose 0.77 percent to close at NT$91.70, and Cathay Financial Holding Co. ended up 0.15 percent at NT$64.90.

Despite a higher Taiex, foreign institutional investors sold a net NT$8.48 billion in shares on the stock exchange Wednesday, according to the TWSE.