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Local shares up on sluggish turnover as dim forecast looms

TAIPEI, Taiwan -- Shares in Taiwan edged higher Tuesday on strong rallies in global equity markets, but the gains were kept in check by technical resistance as the benchmark index approached 8,600 points.

The U.S. dollar fell against the Taiwan dollar Tuesday, shedding NT$0.023 to close at 30.402. Market turnover totaled US$731 million during the trading session.

The weighted index on the Taiwan Stock Exchange rose 15.01 points, or 0.17 percent, to close at 8,575.62 after moving between 8,564.51 and 8,598.73 on turnover of NT$90.71 billion (US$2.98 billion).

The market opened higher on the strength of markets in Europe and the United States overnight and hit the day's high within about half an hour of the opening bell.

Some European markets approached six-year highs and the Standard & Poor's 500 Index in the United States jumped to its highest level in six years at one point.

Traders in Taiwan also drew momentum from rallies in Japan and South Korea, but the enthusiasm dimmed later in the session when trading volume slumped, limiting the day's gains.

Market Will Be Hard-pressed in the Coming Days: Analysts

Analysts said the local market offered technical resistance at 8,600 points, and they predicted that without an upswing in turnover, the market would be hard-pressed to make strong gains in the coming days, especially with international markets not expected to have much more room for growth.

One analyst projected the TAIEX to remain above the one-month moving average of 8,500 but warned that the market would be in consolidation mode in the near future.

Among the strong performers Tuesday were mid- and small-cap stocks, such as netcom service providers.

Shares of SerComm Corp. (中磊電子) and Arcadyan Technology Corp.(智易科技) both gained the maximum daily limit of 7 percent during the session to close at NT$66.0 and NT$55.7, respectively.

By sector, the cement sector scored the biggest gains of any category on Tuesday, rising 1.2 percent, and the heavily weighted electronics sub-index was up 0.32 percent.

Financial shares, however, fell 0.25 percent, with investors still nervous about the potential impact of a proposed increase of the business tax on banking and insurance services.

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