Shares in Taiwan closed up Wednesday as the bellwether electronics sector led the broader market higher, though the gains were partially offset by weakness in the non-tech sector, dealers said.
Turnover remained limited, as many investors stayed on the sidelines, waiting for companies listed on Taiwan and American markets to announce their results to get a better picture of the strength of the global economy, they said.
The Taiex, the Taiwan Stock Exchange’s weighted index, ended up 40.21 points, or 0.24 percent, at 17,074.55, after moving between 16,973.16 and 17,079.60. Turnover totaled NT$280.24 billion (US$10.07 billion).
“Judging from today’s action, the market still moved in a narrow range throughout the session,” Concord Securities analyst Kerry Huang said.
“Today’s limited turnover showed that many investors preferred to take a step back during earnings season,” Huang said.
Because of the relatively light trading, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, remained in consolidation mode, although late buying helped it recoup earlier losses.
TSMC closed unchanged at NT$599.00 after hitting a low of NT$594.00. “The low turnover made it difficult for TSMC to make a breakthrough.”
The silver lining was that some other semiconductor heavyweights attracted buying, in particular late in the trading session, to lend support to the entire electronics sector and the broader market, Huang said.
United Microelectronics Corp. (UMC), a smaller Taiwanese contract chipmaker, rose for the fourth consecutive session, gaining 3.51 percent to close at the day’s high of NT$61.90.
“I think the buying in UMC reflected optimism among investors who expect the company to give strong guidance for the fourth quarter at today’s investor conference at a time of tight chip supplies, which has led to a spike in product prices,” Huang said.
UMC’s buying spread to other semiconductor stocks. New dynamic random access memory chip supplier Nanya Technology Corp. closed 3.92 percent at NT$66.20, but smartphone chip designer MediaTek Inc. lost 0.42 percent to end at NT$942.00.
Buying also rotated to the optoelectronics sector, as bargain hunters took advantage of a recent slump in optoelectronics shares caused by a fall in product prices.
Among them, flat panel maker AU Optronics Corp. rose 2.03 percent to close at NT$17.60, and rival Innolux Corp. gained 1.66 percent to end at NT$15.35.
PC board makers also did well. Unimicron Technology Corp. soared 10 percent, the maximum daily increase, to close at NT$171.50, and rival Kinsus Interconnect Technology Corp. gained 5.72 percent to end at NT$249.50.
The electronics index rose 0.47 percent with the semiconductor sub-index up 0.38 percent.
“While the electronics sector dominated the market, many old economy stocks remained in the doldrums,” Huang said.
In the transportation sector, which lost 1.90 percent, container cargo shipper Wan Hai Lines Ltd. fell 2.55 percent to close at NT$153.00, and rivals Evergreen Marine Corp. and Yang Ming Marine Transport Corp. lost 2.42 percent and 1.22 percent, respectively, to end at NT$92.80 and NT$89.30.
Elsewhere in the old economy sector, Nan Ya Plastics Corp. shed 1.01 percent to close at NT$87.90, and textile brand Far Eastern New Century Corp. dropped 0.34 percent to end at NT$29.45.
Bucking the downturn, Formosa Plastics Corp. rose 0.91 percent to close at NT$111.00.
“Although the Taiex ended above the 60-day moving average of 17,049 points today, it could test that level again because U.S. markets are likely to see volatility during the current earnings season,” Huang said, which could lead to selling in Taiwan by foreign institutional investors.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$2.46 billion in shares Wednesday.
Source: Focus Taiwan News Channel