Lo­cal mar­ket re­bounds, led by large-cap stocks low val­u­a­tion

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan bounced back Thurs­day as bar­gain hun­ters turned ac­tive, tak­ing ad­van­tage of the rel­a­tively low val­u­a­tion of large-cap stocks af­ter a re­cent sell­off by for­eign in­sti­tu­tional in­vestors, deal­ers said.

Driven by the bar­gain­ing hunt­ing, the bell­wether elec­tron­ics and fi­nan­cial sec­tors led the rise of the broader mar­ket, which closed above the 9,600- point mark for the first time in five days, deal­ers said. Petro­chem­i­cal stocks also at­tracted buy­ing in re­flec­tion of a re­bound in in­ter­na­tional crude oil prices overnight, they said.

De­spite the gains in the in­dex, how­ever, the trad­ing vol­ume did not ex­pand sig­nif­i­cantly as many in­vestors were re­luc­tant to chase prices ahead of the up­com­ing four-day Tomb Sweep­ing Fes­ti­val, which will starts Fri­day, deal­ers said.

The weighted in­dex on the Tai­wan Stock Ex­change closed up 92.66 points, or 0.97 per­cent, at 9,600.32, af­ter mov­ing be­tween 9,535.98 and 9,628.95. Turnover to­taled NT$92.43 bil­lion (US$2.96 bil­lion) dur­ing the ses­sion.

The mar­ket opened up 0.40 per­cent and gained steam as mar­ket heavy­weights such as Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. (TSMC, ) and other high­tech stocks emerged from their re­cent slow­down and in­vestors ig­nored a drop on Wall Street overnight, deal­ers said.

As the in­dex breached 9,600 points and moved to­ward the near­est tech­ni­cal re­sis­tance at around 9,650 points, how­ever, the gains were limited by the end of the ses­sion, they said.

Tech­ni­cal Re­bound: An­a­lyst

“I think to­day’s gains were sim­ply tech­ni­cal in na­ture,” said Alex Huang, an an­a­lyst at Mega In­ter­na­tional In­vest­ment Ser­vices Corp. Af­ter the pres­sure placed on the lo­cal mar­ket by for­eign in­sti­tu­tional in­vestors in the past few ses­sions, some of them turned to pick up bar­gains for trad­ing pur­poses, Huang said.

“Although the lo­cal mar­ket has tech­ni­cally im­proved af­ter to­day’s gains, it still needs more time to con­sol­i­date as many in­vestors re- main cau­tious about the up­com­ing earn­ings sea­son on Wall Street,” he said.

Huang noted that that the re­bound on the lo­cal main board was led largely by mar­ket heavy­weights.

“Judg­ing from the gains posted by those big guys, I sus­pect that for­eign in­sti­tu­tional in­vestors were the main buy­ers to­day,” he said

For­eign In­vestors Buy

NT$5.27 bil.

Ac­cord­ing to the TWSE, for­eign in­sti­tu­tional in­vestors bought a net NT$5.27 bil­lion worth of lo­cal shares Thurs­day af­ter a net sell of NT$45.8 bil­lion in the pre­vi­ous seven ses­sions.

Among the stocks, TSMC, gain­ing high-tech the most heav­ily weighted stock on the lo­cal mar­ket, rose 2.08 per­cent to close at NT$ 147.00 with 49.28 mil­lion shares chang­ing hands. Huang said. He said that TSMC, how­ever, may reach a tech­ni­cal ceil­ing of around NT$155 ahead of its April 16 in­vestor con­fer­ence.

“Un­less TSMC’s first quar­ter re­sults and sec­ond quar­ter guid­ance sur­prise the mar­ket, it would be hard for the stock to make a break­through any time soon,” Huang said.

In­te­grated cir­cuit pack­ag­ing and testing ser­vices provider Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. ( ) gained 1.79 per­cent to end at NT$42.70, and ri­val Sil­i­con­ware Pre­ci­sion In­dus­tries Co. (

) climbed 2.18 per­cent to close at NT$51.60.

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