TAIEX adopts consolidation mode as tech big guns falter
May 11, 2013, 12:17 am TWN
TAIPEI -- Shares in Taiwan fell into a consolidation mode Friday after the local bourse made a strong showing earlier this week, pushing the index closer to stiff technical resistance ahead of 8,300 points, dealers said.
Many high-tech heavyweights, such as Taiwan Semiconductor Manufacturing Co. (TSMC), which posted significant gains in the past few sessions, appeared lackluster, while buying rotated to market laggards such as textile and financial stocks, to lend some support to the broader market, the dealers said.
The weighted index closed down 5.63 points, or 0.06 percent, at 8,280.26, after moving between 8,258.62 and 8,297.33 on turnover of NT$80.89 billion (US$2.73 billion).
The market opened down 1.51 points as investors took cues from a mild pullback on Wall Street overnight, and selling continued until the end of the session as investors declined to pick up large-cap electronics stocks, the dealers said.
"The retreat showed that technical resistance ahead of 8,300 points was strong, forcing many investors to take a breather for the moment," Ta Ching Securities analyst Andy Hsu said.
In the first four trading sessions of this week, the local bourse gained about 1.9 percent, which prompted the broader market to consolidate Friday, Hsu said, adding that without a strong showing by large- cap electronics, the market appeared very quiet throughout the session.
TSMC, the most-weighted stock in the local market, fell 0.43 percent to close at NT$114.50, while Hon Hai Precision Industry Co., the world's largest electronics maker, lost 1.35 percent to end at NT$80.50.
Innolux Corp., Taiwan's largest flat panel supplier, shed 2.11 percent to close at NT$18.60 as investors shrugged off an improvement in the company's first quarter results, which showed a profit for the quarter, snapping a 10-quarter losing streak.
However, United Microelectronics Corp. rose 5.88 percent to close at NT$12.60 on a catch-up play to its rival, TSMC.
"Fortunately, the local bourse seemed resilient compared with the market in Seoul, which was hammered by a plunge of the Japanese yen," Hsu said. "There have been concerns that the yen's weakness will trigger a currency depreciation competition in the region that will lead to fund outflows."
The electronics sector closed down 0.48 percent, while the textile and financial sectors bucked the downward trend by ending up 0.67 percent and 0.47 percent, respectively.
Among the rising financial stocks, Shin Kong Financial Holding Co. gained 2.27 percent to close at NT$9.92 on hopes that the company will come up with positive leads in an investor conference scheduled for next week, while Taishin Financial Holding Co. added 1.51 percent to end at NT$13.45.
In the old economy sector, textile maker Far Eastern New Century Corp. rose 1.40 percent to close at NT$32.70, and Formosa Plastics Corp. added 0.68 percent to end at NT$74.00.