Taipei--Shares in Taiwan staged a technical rebound Wednesday as bargain hunters increased their holdings in the electronics sector, dealers said.
Large-cap high-tech stocks such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and iPhone assembler Hon Hai Precision Industry Co. (??) bounced back from early losses to vault the weighted index above 10,400 points in the final minutes of the session, they said.
The weighted index on the Taiwan Stock Exchange ended up 57.01 points, or 0.55 percent, at the day's high of 10,404.79, off an early low of 10,304.74, on turnover of NT$83.64 billion (US$2.74 billion).
The market opened up 4.61 points but soon fell below the previous day's close as the electronics sector came under pressure on fears it could be dragged down by continued selling of tech shares in the United States, dealers said.
But with the weighted index moving closer to the nearest technical resistance at around 10,300 points, bargain hunters turned active and picked up large cap stocks such as TSMC and Hon Hai, which had slumped recently because of steep falls in the tech-heavy Nasdaq index and Philadelphia Semiconductor Index.
"Judging from today's movement, the local market seemed to have strong technical support ahead of the 20-day moving average at around 10,300 points," Concord Securities analyst Kerry Huang said.
"But despite the gains, the market remains in consolidation mode. It's still worried about uncertainty over the movement of U.S. high tech stocks, which are highly correlated with the local electronics sector," Huang said.
The rebound staged by the electronics sector helped the market return to positive territory and finish at the day's high, Huang said.
The bellwether electronics sub-index rose 0.84 percent after TSMC, the most heavily weighted stock in the local market, rose 0.72 percent to close at NT$208.50, off an early low of NT$206.50, with 23.28 million shares changing hands.
Hon Hai, the second largest stock in terms of market capitalization, gained 2.65 percent to close at NT$116.00 after hitting a low of NT$113.00.
Also in the high-tech sector, Catcher Technology Co. (??), a metal casing supplier to Apple, rose 2.92 percent to close at NT$370.00, off a low of NT$356.00, and flat panel maker Innolux Corp. (??) gained 1.58 percent to end at NT$16.10, off a low of NT$15.97.
In the non-high-tech sector, Formosa Plastics Corp. (??) rose 0.97 percent to close at NT$93.90, and food brand Uni-President Enterprises Corp. (??) gained 0.66 percent to end at NT$61.00, while Cathay Financial Holding Co. (???) fell 0.61 percent to close at NT$49.00.
"Even if the market continues to move higher, there will only be limited upside because investors are reluctant to chase prices before companies report their second quarter earnings and give guidance for the third quarter, starting next week," Huang said.
TSMC, the world's largest contract chip maker, has scheduled its investor conference for July 13.
Source: Focus Taiwan News Channel
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