Local market ends flat on reduced turnover
CNATAIPEI -- Shares in Taiwan ended little changed Friday on reduced turnover as many investors retreated from the trading floor ahead of the Lunar New Year holiday, dealers said.
January 25, 2014, 12:03 am TWN
Buying in select large-cap stocks in the bellwether electronics sector helped offset the impact from the losses posted on Wall Street overnight, while the construction sector faced relatively heavy selling due to a new government measure that aims to cap luxury home prices, they said.
The weighted index of the Taiwan Stock Exchange closed up 3.21 points, or 0.03 percent, at 8,598.31 after moving between 8,577.14 and 8,608.64 on turnover of NT$82.62 billion (US$2.74 billion).
The market opened down 0.16 percent and moved to the day's low in the early session in a knee-jerk reaction to overnight losses on Wall Street, dealers said.
Bargain hunters kicked in, though, focusing on select large-cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC) and Hon Hai Precision Industry Co to vault the index back to positive territory by the close, they said.
Monday Last Session Before CNY Holiday
“It was normal that turnover fell as more investors stayed on the sidelines with the index fluctuating in a narrow range before the prolonged Lunar New Year holiday,” Ta Ching Securities analyst Andy Hsu said.
“Such quiet trading could continue Monday, the last session before the holiday, amid fears over possible negative leads emerging overseas during the holiday,” Hsu said. The local bourse is scheduled to reopen Feb. 5.
Although the Dow Jones Industrial Average fell more than 170 points overnight amid worries over corporate earnings, Hsu noted the local bourse appeared resilient as select market heavyweights managed themselves well above the previous close.
“Late session buying focused on stocks, like TSMC and Hon Hai, which leads me to suspect support from the government, which did not want the local bourse to suffer heavy losses before the new year holiday,” he said.
TSMC, the most heavily weighted stock in the local bourse, closed up 0.47 percent at NT$108.00 off an early low of NT$107.00, while Hon Hai, which assembles iPhones and iPads for Apple Inc., gained 1.31 percent to end at NT$85.00 after recovering from an early low of NT$83.70.
Smartphone camera lens maker Largan Precision Co., a local supplier to Apple, fell 2.11 percent to close at NT$1,160.00, despite the company reporting a 72 percent increase in net profit for 2013.
“Investors simply locked in the gains they posted in recent sessions. After the significant recent uptrend, Largan shares are expected to consolidate between NT$1,100 and NT$1,250 in the near future,” Hsu said.
In the construction sector, which closed down 0.74 percent on the government's move to impose a new tax on luxury housing, Farglory Land Development Co. lost 1.52 percent to close at NT$48.50 and Chong Hong Construction Co. was down 1.81 percent to end at NT$81.60.
“I expect the government will come up with more measures in a bid to rein in home prices so I do not think property stocks will be a good investment for investors for now,” Hsu advised.