Shares higher, close at 8,181.24 as electronics sector ends the day up
Shares in Taiwan recouped earlier losses to close higher Wednesday as the bellwether electronics sector as a whole moved higher on the back of bargain hunting led by large-cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, ), dealers said.
However, Largan Precision Co. ( ), a smartphone camera lens supplier to Apple Inc., came under heavy pressure throughout the session as investors took into account a downgrade by a foreign brokerage in the Taiwanese firm’s earnings, the dealers said.
Despite a recovery from the weighted index’s earlier losses, investor sentiment remained cautious about the market outlook amid lingering concerns over the global economy and an interest rate hike by the U.S. Federal Reserve, they added.
The weighted index on the Taiwan Stock Exchange ended up 48.89 points, or 0.60 percent, at the day’s high of 8,181.24, off an early low of 8,059.68, on turnover of NT$102.23 billion (US$3.11 billion).
The market opened down 0.66 percent as investors took into account volatility on the global equity markets in the past two sessions, when the Taiwan market was closed for the mid-Autumn Festival holiday and due to an interruption from Typhoon Dujian the following day, the dealers said.
With the index moving to the nearest technical support range between 8,030 and 8,070, bargain hunters became active to pick up market heavyweights, including TSMC and other semiconductor stocks, to help the broader market close above the previous closing level, they said.
“After Monday’s slump, the Dow Jones Industrial Average recovered overnight. In addition, a rebound on the Tokyo and Shanghai markets today also prompted investors here to pick up bargains,” Mega International Investment Services Corp. analyst Alex Huang said.
Bellwether Electronics Sector
“On the back of a rebound by the bellwether electronics sector as a whole, the entire main board climbed out of its earlier slump and closed higher,” Huang said. “TSMC served as an anchor to stabilize the broader market.”
The electronics sub- index closed up 0.95 percent at 316.37 points, off an early low of 310.68, while the semiconductor sub-index ended up 1.77 percent. TSMC, the most heavily weighted stock in the local market, closed up 2.36 percent to close at NT$130.00, integrated circuit designer MediaTek Inc. ( ) rose 2.74 percent to end at NT$243.50, and IC packaging and testing services provider Advanced Semiconductor Engineering Inc. (
) gained 2.17 percent to end at NT$35.30.
Bucking the upturn, Largan fell 6.23 percent to close at NT$ 2,560.00 after Citigroup Global Markets cut its forecast of Largen’s earnings per share for 2015 and 2016, a move that led investors to ignore record first weekend sales of the iPhone 6s and iPhone 6s Plus.
Bargain hunting also lifted select financial stocks, Huang said. Cathay Financial Holding Co. (
) was one of them, up 0.22 percent to close at NT$44.95, off an early low of NT$43.40.
“The local main board is likely to continue to rebound, but the room for gain could be limited, as technical hurdles are expected to emerge at around 8,400 points,” Huang said. “Investor confidence remained overshadowed by fears over further turmoil in the global markets at a time when major economies, in particular China, are slowing down.”
“More important, a possible interest rate hike by the U.S. Federal Reserve is expected to keep investors alert,” Huang said.