Taiwan shares close up by 0.68 percent

The weighted index rose 51.97 points to 7,668.25, after moving between 7,625.72 and 7,679.43, on turnover of NT$106.59 billion (US$3.33 billion).

The market opened up 0.36 percent as investors took advantage of low valuations as a result of the previous day's dive, and bargain hunters became more active during the trading session, largely picking up traditional industrial stocks to push the index higher, the dealers said.

A total of 2,515 stocks closed up and 1,150 were down, with 267 remaining unchanged.

The construction sector posted the highest gains, up 4.08 percent. Paper and pulp stocks rose 2.54 percent, cement shares gained 1.57 percent and foodstuffs added 1.17 percent.

The textile sector closed up 0.95 percent, and the plastics and chemical sector was up 0.71 percent, while financials gained 0.68 percent, and machinery and electronics stocks rose 0.34 percent.

“Yesterday's gains were just technical in nature after Tuesday's fall,” TLG Asset Management analyst Arch Shih said.

Buying mostly concentrated on old economy stocks that are expected to benefit from closer business ties across the Taiwan Strait, Shih said.

“But, please remain cautious about strong resistance ahead of 7,700 points, as fears of a slowing global economy are still weighing on the market,” he said.

Shih said there is no indication that Wall Street will leave the current volatility behind, adding that foreign institutional investors might further cut their holdings in local high tech heavyweights on global demand concerns.

“That's why the bellwether electronics sector has appeared lackluster compared with the broader market, particularly after Quanta lowered its shipment forecast for the third quarter of this year,” Shih said.

Quanta, a notebook computer ODM provider, said a day earlier that it expected its shipments for the July September period to rise or fall 5 percent from the second quarter compared with its previous forecast of 10 percent-15 percent growth.

“Following Hon Hai Precision's disappointing first half results, Quanta's downgrading of its forecast has made many investors nervous,” Shih said.

Quanta fell 6.48 percent to NT$45.50, and Hon Hai, the world's largest contract electronics product maker, extended its losses from Tuesday, losing 3.98 percent to NT$108.50.

In the construction sector, Cathay Real Estate rose 4.73 percent to close at NT$15.50, while Prince Housing gained 4.92 percent to end the day at NT$19.20.

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