Gains on local bourse capped as select high-tech stocks fall
CNATAIPEI -- Shares in Taiwan ended higher yesterday, but gains were capped by selling in select electronics stocks on disappointing February sales results, dealers said.
March 7, 2013, 12:36 am TWN
Smartphone camera lens supplier Largan Precision Co. and metal casing maker Catcher Technology Co. trended lower due to steep drops in sales, they said.
The old economy sector, however, stabilized the broader market amid hopes that China will continue to stimulate domestic demand, which could benefit Taiwanese companies operating on the mainland, they said.
The weighted index closed up 17.59 points, or 0.22 percent, at 7,950.30, after moving between 7,936.86 and 7,982.39, on turnover of NT$94.49 billion.
The market opened up 0.32 percent and quickly moved to the day's high after Wall Street hit a record high overnight on the back of improving economic data, dealers said.
But when the Taiex faced technical resistance as it moved closer to 8,000 points, profit-taking emerged, in particular in the electronics sector, to erase some of the broader market's gains by the end of the session, they said.
“Largan's and Catcher's sales for February showed the impact of the reduced number of working days in the month because of the Lunar New Year holiday,” President Securities analyst Vickie Hsieh said.
“Although many investors expected these companies' sales to pick up in March, they preferred to pocket gains for the time being to avoid further possible volatility in share prices caused by slow season effects in the first quarter,” Hsieh said.
Largan fell 5.28 percent to close at NT$772.00 after the company reported a 45 percent month-on-month decline in sales in February, while Catcher shed 4.12 percent to end at NT$128.00 after its sales fell 38 percent month-on-month in February.
The electronics subindex closed down 0.02 percent. Taiwan Semiconductor Manufacturing Co. (TSMC), the most weighted stock in the market, closed unchanged at NT$104.00 and Hon Hai Precision Industry ended up 0.63 percent at NT$80.50.
“Fortunately, old economy industrial stocks, such as food companies, which have close business ties with China, appeared resilient and lent some support to the broader market,” Hsieh said.
Among the winning old economy stocks, food maker Uni-President Enterprises Corp. gained 2.98 percent to close at NT$58.70, and Nan Ya Plastics Corp. rose 2.38 percent to end at NT$56.00.
The food sector closed up 1.18 percent and the plastics sector ended up 1.24 percent.
“Due to the support of old-economy stocks, the index closed above the five-day moving average of around 7,922 points. So I think the local bourse remains technically healthy,” Hsieh said.
“I expect the market will consolidate for some time before digesting pressure ahead of 8,000 points,” she said.