Taiwan shares end little changed as earlier gains eroded
Shares in Taiwan closed little changed Thursday as the index gave up most of its earlier gains, with downward pressure focusing on large-cap stocks in the financial and old economy sectors, dealers said.
The silver lining for the market was that the bellwether electronics sector, led by Taiwan Semiconductor Manufacturing Co. (TSMC,
), continued to move higher, offsetting the impact from selling in the non-tech sector, the dealers said.
Turnover remained moderate as many investors stayed on the sidelines after spotting foreign institutional investors maintaining a large number of net short-position contracts in the futures market, which raised fears of more foreign institutional selling in the spot market, they added.
The weighted index on the Tai- wan Stock Exchange ended up 3.99 points, or 0.04 percent, at 9,302.49, after moving between 9,251.18 and 9,358.48, on turnover of NT$97.36 billion (US$3.15 billion).
The market opened up 0.43 percent in a knee-jerk reaction to a higher Wall Street and higher European markets overnight, and rose to the day’s high amid reduced concerns over the debt problems encountered by Greece, the dealers said.
Interests in High-tech
With the index briefly breaching the nearest technical resistance level of 9,350 points, investors started taking profits, which pushed down the index, but interest in high-tech heavyweights remained to offset the downward pressure, and this helped the broader market to end above the previous closing level, the dealers said.
“Without electronics stocks, in particular TSMC, the local equity market could have suffered more selling and could have ended lower today,” Marbo Securities Investment Consulting analyst Chang Chih-cheng said.
TSMC, the most heavily weighted stock in the local market, rose 2.87 percent to close at NT$143.50, with 44.68 million shares changing hands. “I think that many investors have high hopes that TSMC will achieve its second-quarter sales target (of NT$204 billion-NT$207 billion) without any problems.”
Interest in the high-tech sector also spread to other heavyweights, such as smartphone camera lens supplier Largan Precision Co. (
), which added 2.60 percent to end at NT$3,355.00 on expecta- tions that its sales momentum will pick up in the second half of this year due to orders from Apple Inc.
Hon Hai Precision Industry Co. ( ), the world’s largest contract electronics maker, which assembles iPhones and iPads for Apple, ended up 0.21 percent at NT$95.80, recovering from an early low of NT$94.50. The company reported a day earlier that it posted NT$301.60 billion in consolidated sales for May, better than the market had previously anticipated.
While the electronics sub-index ended up 0.48 percent, the financial sector closed down 0.31 percent as investors took advantage of the sector’s upturn seen a session earlier.
CTBC Financial Holding Co. (
) fell 1.25 percent to close at NT$ 23.70 and Mega Financial Holding Co. ( ) lost 1.08 percent to end at NT$27.40, while Cathay Financial Holding Co. (
) rose 0.19 percent to close at NT$52.80.
Among the falling old economy stocks, Taiwan Cement Corp. (
) shed 1.68 percent to close at NT$38.15 and textile maker Far Eastern New Century Corp. (
) lost 1.84 percent to end at NT$31.95.
“The moderate turnover showed that many investors remained reluctant to chase prices, a move that caused the index to fall from the initial gains,” Chang said.
“Fears still haunted market sentiment that foreign institutional investors will stay on the sell side in the spot market, as they kept net large short-position contracts in futures at more than 18,000 Wednesday,” Chang said.
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