Local bourse ends flat ahead of psychological 8,000 mark
The China Post news staff and CNATAIPEI, Taiwan -- Shares in Taiwan closed little changed Wednesday after a seesaw trading session in which the market was unable to break through technical resistance ahead of the 8,000-point mark, dealers said.
March 14, 2013, 12:00 am TWN
While the broader market was in a consolidation mode throughout the session, buying in select large-cap firms, in particular Taiwan Semiconductor Manufacturing Co. (TSMC), the most weighted stock in Taiwan, kept the broader market from finishing in negative territory, they said.
Investors were cautious over the repeated highs reached on Wall Street recently, fearful of a major pullback that could rock financial markets around the world, including in Taiwan, they added.
The weighted index closed up 0.80 points, or 0.01 percent, at 7,995.51 after moving between 7,962.42 and 8,047.56, on turnover of NT$81.23 billion (US$2.74 billion).
The market opened 0.30-percent higher to breach 8,000 points, and rose to the day's high on momentum from the gains posted on Wall Street overnight, dealers said.
But investor anxiety and technical factors then kicked in to prevent the weighted index from staking out ground well above 8,000.
“Today's trade was quiet with many investors sidelined amid fears over any imminent major correction as the index approached 8,000 points,” President Securities analyst Vickie Hsieh said.
“The market lacked a mainstream sector to help the index stay above the 8,000-point level,” Hsieh said. “Moreover, the reduced turnover made it unlikely that the market will make a breakthrough any time soon.”
Hsieh said there have been concerns that Wall Street, which finished at a record high for the consecutive sixth trading session overnight, will soon suffer a pullback, and many investors were also wondering when markets in China would stage a meaningful rebound.
“The local market remained haunted by the uncertainty from abroad. I expect the index to continue to move in a narrow range over the next few sessions,” Hsieh said.
The life insurance sector was bullish yesterday, supported by talks of futures transaction tax cut and of the inclusion of financial services in free economic demonstration zones in Taiwan yesterday. Cathay Financial Holdings rose 0.4 percent to close at NT$40.95, Fubon Financial surged 0.25 percent to end at NT$42.35 and China Life closed up 0.65 percent to NT$30.65.
The plastics sector suffered a steep decline, down 2.42 percent, with Formosa Plastics Corp. down 2.64 percent to close at NT$73.50, and Nan Ya Plastics Corp. down 3.44 percent to end at NT$56.10.
“Fortunately, electronics heavyweights, in particular TSMC, posted gains, lending some support to the broader market. Otherwise, the index would have finished down,” Hsieh said.
TSMC rose 1.95 percent to close at NT$104.50, while Delta Electronics Corp, a leading Taiwan-based power management solutions provider, gained 7 percent, the maximum daily increase, to end at NT$119.00 after the company reported record earnings for 2012.
But smartphone vendor HTC Corp. fell 3.98 percent to close at NT$241.00 amid worries that component shortages will hurt the company's shipments of its new HTC One.