Local shares up as electronics stocks rebound
March 12, 2014, 12:06 am TWN
TAIPEI--Shares in Taiwan closed higher Tuesday, returning to above the 8,700-point mark, after the bellwether electronics sector staged a rebound following a slump in a session earlier, dealers said.
Turnover remained thin, however, as many investors stayed on the sidelines, waiting to see how the political crisis in Ukraine will evolve and if it will create volatility in the global equity markets, they said.
Despite a rebound in electronics shares, buying in old economy stocks remained weak amid concerns over China's economy, which experienced a double-digit decline in exports in February, they added.
The weighted index on the Taiwan Stock Exchange ended up 37.09 points, or 0.42 percent, at 8,702.33, after moving between 8,684.63 and 8,716.31, on turnover of NT$86.76 billion (US$2.86 billion).
The market opened up 0.34 percent as bargain hunters took advantage of the losses incurred a session earlier to buy into large-cap electronics stocks, in particular Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), dealers said.
The momentum was sustained well into the session, vaulting the index past the 8,700-point threshold, before some investors rushed to lock in their earlier gains, they said.
"Today's gains were simply technical in nature as geopolitical issues related to Ukraine remain," Hua Nan Securities analyst Henry Miao said.
"Investors have kept a close eye on a referendum in Ukraine's Crimea region scheduled for March 16 to decide whether to return the region to Russian control.
"Look at the thin trading volume. Many investors were reluctant to chase prices to push the index even higher at the close," Miao said.
Before the profit taking seen late in the session, the broader market got a boost from the gains posted by large-cap high-tech stocks, with TSMC serving as the anchor that stabilized the market, Miao said.