Bourse ends up on mild rebound
September 28, 2012, 1:47 pm TWN
TAIPEI -- The local bourse staged a mild technical rebound yesterday from a slump during the previous session, but the gains were limited by stiff technical resistance ahead of 7,700 points, dealers said.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chip-maker, led the high-tech sector to push the index above the previous close on the back of futures-driven buying, they said.
The weighted index closed up 14.17 points, or 0.18 percent, at 7,683.80, after moving between 7,658.71 and 7,699.23, on turnover of NT$77.28 billion.
The market opened down 3.74 points and moved to the day's low on follow-through selling from the previous session, but large-cap high tech stocks, such as TSMC and flat panel maker AU Optronics Corp. (AUO), regained their footing to help the broader market return to positive territory, the dealers said.
"After Wednesday's 0.83-percent decline, which pushed the index below 7,700 points, technical resistance ahead of that level has become strong," Concord Securities analyst Kerry Huang said.
"Although the market managed to make a turnaround, the strength was not significant enough to jump the technical hurdle," Huang said.
He said that as investors pushed up large-cap stocks in the spot market in a bid to profit in the futures market, buying returned to the electronics sector during the session.
Among the winning electronics stocks, TSMC rose 1.39 percent to close at NT$87.60 with 53.92 million shares changing hands, while AUO gained 2.78 percent to end at NT$11.10 on trading volume of 64.69 million shares.
TPK Holding, one of Taiwan's leading touch panel makers, added 0.51 percent to close at NT$396.00 after the company raised US$436 million in funds overseas by issuing US$236 million in global depositary receipts and US$200 million in convertible bonds.
"Despite the rebound, market sentiment remained cautious about the debt problems in the eurozone, driving many investors to the sidelines," Huang said, referring to the moderate daily trading volume.
Huang said the market is watching closely how the Spanish government will present its 2013 budget plan later this week amid protests over austerity measures there.
"Unless turnover expands to NT$100 billion or higher, the local bourse is unlikely to move out of the current doldrums," he said.
At the end of the session, the machinery and electronics, as well as foodstuffs sectors had scored the highest gains among the eight major market sectors, finishing up 0.3 percent. Cement, financial, and paper and pulp stocks all gained 0.1 percent.
Bucking the upward trend of the broader market, the construction sector lost 0.3 percent, and textiles fell 0.1 percent, while the plastics and chemical sector closed unchanged.