Shares in Taiwan bounced back from early losses on Wednesday, closing up more than 100 points, boosted by large-cap tech stocks and shares in the transportation sector, dealers said.
Turnover remained thin, however, as many investors stayed on the sidelines ahead of the conclusion of the United States Federal Reserve’s policymaking meeting later in the day, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 114.81 points, or 0.78 percent, at 14,921.59, after moving between 14,717.02 and 14,921.59. Turnover totaled NT$184.80 billion (US$6.17 billion).
The market opened down 0.10 percent, and selling accelerated, particularly in the mid-morning session, with the bellwether electronics sector in focus, as investors took cues from the losses on the tech-heavy Nasdaq index and the Dow Jones Industrial Average in the U.S. on Tuesday, dealers said.
As the Taiex moved closer to the 14,700-point mark, however, some investors shifted to the buy side, picking up bargains among tech heavyweights, betting on a higher opening on the spot market later in the day, dealers said.
Cautious market sentiment
“Today’s gains were technical in nature after yesterday’s (0.87 percent) fall,” Hwa-Guan Securities Consulting analyst Fan Chen-hung said. “Looking at the thin turnover, it seems that market sentiment remained cautious ahead of the conclusion of the Fed meeting.”
Fan said the market is widely anticipating that the Fed will raise its key interest rates by 75 basis points, as it did in June, to deal with high inflation, after the U.S. consumer price index soared by a record 9.1 percent last month.
“If the U.S. rate hike turns out to be 75 basis points, as expected, the global financial markets may celebrate, as the negative lead has been priced in,” Fan said. But if the increase is bigger than that, say 100 basis points, it could be disastrous for the markets.”
On Wednesday, following a rebound in U.S. futures, large-cap tech stocks in Taiwan climbed out of their early weakness, with the semiconductor sub-index closing up 1.26 percent and the electronics sector finishing 1.23 percent higher.
Tech stocks
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, rose 1.41 percent to close at the day’s high of NT$502.00, after coming off a low of NT$491.00.
United Microelectronics Corp., a smaller contract chipmaker, climbed 2.20 percent to end at NT$39.45, while Powerchip Semiconductor Manufacturing Co. gained 1.54 percent to close at NT$39.45, but Smartphone IC designer MediaTek Inc. lost 0.59 percent to finish at NT$677.00.
Buying was also seen among electronics component stocks, with Unimicron Technology Corp., one of Taiwan’s major Ajinomoto Build-up Film (ABF) suppliers, soaring 5.59 percent to end at NT$179.50 and rival Nan Ya Printed Circuit Board Co. gaining 3.54 percent to close at NT$263.50.
iPhone assembler Hon Hai Precision Industry Co. underperformed the broader market, ending unchanged at NT$108.00.
Shipping firms, airlines and others
While many old economy stocks appeared mixed, investors resumed buying in the transportation sector, which rose 2.17 percent after its recent losses, Fan said.
Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 2.51 percent to close at NT$94.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 1.73 percent and 3.98 percent, respectively, to end at NT$88.20 and NT$104.50.
Amid continued optimism that the Taiwan government will further ease its border controls soon, China Airlines rose 1.99 percent to close at NT$23.10, and EVA Airways gained 1.48 percent to end at NT$34.30.
Elsewhere in the old economy sector, Formosa Plastics Corp. lost 0.11 percent to close at NT$90.20, while Formosa Chemicals & Fibre Corp. rose 0.44 percent to end at NT$68.70. Textile brand Far Eastern New Century Corp. closed unchanged at NT$31.75, and Eclat Textile Co. dropped 1.37 percent to end at NT$431.50.
Outlooks
“After the Fed meeting, investors are expected to pay greater attention to corporate fundamentals, so the ongoing earnings season will play a bigger role in the market,” Fan said, referring to the upcoming investor conferences by American tech heavyweights such as Apple Inc., Meta, Amazon and others later this week.
If the technical rebound continues, he said, the Taiex is expected to meet resistance as it moves closer to 15,102 points, the intraday low on June 23.
According to the TWSE, foreign institutional investors bought a net NT$6.16 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel