TAIEX makes gains as financial stocks rebound
CNATAIPEI--Shares in Taiwan closed up Tuesday as financial stocks staged a rebound on hopes that the government will relax restrictions on China investments for the sector, dealers said.
September 4, 2013, 2:20 am TWN
Local manufacturers in Apple Inc.'s supply chain continued to post gains, as many investors anticipated that the U.S. consumer electronics giant will launch new iPad and iPhone models later in the year, the dealers said.
The gains, however, were capped as the index moved closer to the nearest technical resistance level at around 8,100 points amid lingering concerns over a possible tapering off of stimulus measures by the U.S. Federal Reserve, they added.
The weighted index ended up 49.51 points, or 0.61 percent, at 8,088.37, after moving between 8,067.62 and 8,102.66, on turnover of NT$80.04 billion (US$2.69 billion).
The market opened up 0.71 percent on follow-through buying from the previous session as the financial sector posted gains amid optimism that their bottom lines will benefit from an increase in China investment as the government continues to mull the possibility of relaxing investment restrictions, the dealers said.
While buying also focused on select electronics stocks, in particular Apple concept stocks, the market faced profit-taking selling after the index briefly breached 8,100 points, they said.
“The local market basically moved up on rotational buying today, as the financial sector led the index higher,” Mega International Investment Services Corp. analyst Alex Huang said.
In a meeting held the previous day, the Financial Supervisory Commission -- Taiwan's top financial regulator -- said it is considering the feasibility of raising a 15 percent ceiling on a bank's net worth for investment it might want to put into China.
“The move to relax the investment restrictions is positive for the financial sector's bottom line in the long run. That's why investors rushed to buy into financial stocks today,” Huang said. “After consolidating for some time, the financial sector appeared attractive.”
The financial sub-index closed up 1.31 percent, with Mega Financial Holding Co. up 1.75 percent to end at NT$23.20 and CTBC Financial Holding Co. up 2.39 percent to close at NT$19.30.
Buying also spread to select local manufacturers in the Apple supply chain, Huang said.
Hon Hai Precision Industry Co., which assembles iPads and iPhones for Apple, gained 0.49 percent to close at NT$82.00, while metal casing supplier Catcher Technology Corp. added 4.58 percent to end at NT$148.50.
Wistron Corp. closed up 6.27 percent at NT$30.50 on market speculation that the company is in talks with Apple to receive orders to assemble low cost iPhones, the dealers said.
However, the auto sector underperformed the broader market, down 1.03 percent, after car vendors reported a 46.7 percent month-on-month decline in car sales for August.
“Despite the latest gains, the local market failed to stand above 8,100 points as some investors tended to pocket their profits amid fears over the Fed's monetary tightening,” Huang said.
“Investors should pay close attention to the August non-farm payroll data due Sept. 6 for a clearer picture of what the Fed will do next,” he said.