Taiwan shares end slightly higher as gains eroded

Shares in Taiwan closed slightly higher on thin turnover Wednesday as investors shifted to the sell side to lock in their earlier gains despite a rally on the U.S. markets overnight, dealers said.

The bellwether electronics sector drove the broader market higher with select large-cap semiconductor and optoelectronics stocks in focus, while the shipping and steel industries faced downward pressure to limit the gains on the main board, they said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 37.56 points, or 0.21 percent, at 17,826.83, after moving between 17,799.72 and 17,870.16. Turnover totaled NT$251.99 billion (US$9.06 billion).

The market opened up 16.47 points and soon rose to the day's high after the gains posted on the U.S. markets, where the Dow Jones Industrial Average rose 1.60 percent and the Nasdaq index added 2.40 percent on a technical rebound from a recent slump amid rising COVID-19 concerns, dealers said.

However, after moving closer to 17,900 points, the Taiex then fell, moving in a narrow range for the rest of the session with investors locking in their earlier gains, dealers added.

"With more and more foreign institutional investors away from the market for the Christmas and New Year holidays, trading was light," Moore Rich Securities Investment Consulting analyst Chang Chih-cheng said.

Wednesday's turnover dipped to the lowest level since Sept. 16, when trading volume stood at NT$242.58 billion.

"After yesterday's strong showing, it was no surprise that the Taiex saw a lot of consolidation today. Although the tech sector continued to move higher, its gains appeared limited," Chang said.

On Tuesday, the local main board increased by 120.16 points, or 0.68 percent.

The electronics sector rose by 0.42 percent to end at 853.29 but came off a high of 855.80, with the semiconductor sub-index up 0.45 percent.

"On the absence of foreign institutional investors, contract chipmaker TSMC (Taiwan Semiconductor Manufacturing Co.) moved higher but its gains were insignificant," Chang said. "The silver lining is that UMC (United Microelectronics Corp.) posted higher gains [to serve] as one of the anchors in the tech sector."

TSMC, the most heavily weighted stock in the local market, rose 0.50 percent to close at NT$600.00, and UMC, a smaller contract chipmaker, rose 1.27 percent to end at NT$63.70 on media reports that the company had raised product prices for next year due to a tight global chip supply.

Bucking the downturn, smartphone chip designer MediaTek Inc. lost 0.46 percent to close at NT$1,085.00, but buying rotated to smaller IC designers with Faraday Technology Corp., an application specific integrated circuit (ASIC) designer, up 1.89 percent to end at NT$243.00.

After a U.S. brokerage raised a target price to NT$2,600 from NT$2,300 amid rising optimism toward the company's business outlook, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., continued its momentum from a session earlier, rising by 2.70 percent to close at NT$2,475.00. But rival Genius Electronic Optical Co. fell by 2.16 percent to end at NT$544.00.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. fell by 0.96 percent to close at NT$103.50, while Yageo Corp., the world's third-largest multi-layer ceramic capacitor supplier, rose by 3.19 percent to end at NT$469.50.

"As tech stocks dominated today's trading, many old economy stocks appeared muted. In particular, shipping and steel stocks experienced profit-taking after their recent upturn," Chang said.

The transportation sector, where many major shipping stocks are traded, declined by 0.99 percent. In the sector, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, fell by 1.06 percent to close at NT$140.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. decreased by 1.20 percent and 1.45 percent, respectively, to end at NT$124.00 and NT$204.00.

Selling was also seen among cargo shippers with Tze Shin International Co. declining by 1.46 percent to close at NT$20.25, and Chinese Maritime Transport Ltd. falling by 0.81 percent to end at NT$61.20.

The steel sector fell by 0.48 percent with China Steel Corp., Taiwan's largest steelmaker, down by 0.14 percent to close at NT$35.65, and Tung Ho Steel Enterprise Corp. falling by 1.60 percent to end at NT$67.60.

"Turnover is expected to continue to stay low before foreign institutional investors return from the New Year holiday. So, it is not easy for the Taiex to jump over the high technical hurdles ahead of 18,000 points anytime soon," Chang said.

"But, the index could see strong support at around 17,400 points if it encounters volatility," Chang added.

According to the TWSE, foreign institutional investors bought a net NT$1.77 billion worth of shares on the main board Wednesday.

Source: Focus Taiwan News Channel