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Local market ends higher on late session bargain hunting

TAIPEI--Shares in Taiwan closed higher Thursday as late session bargain hunting relieved earlier downward pressure to vault the index back into positive territory, dealers said.

The late session buying focused on select large-cap high-tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) and Hon Hai Precision Industry Co. (鴻海精密), while investors also rushed to pick up financial heavyweights, as well as cement stocks, to boost the broader market, the dealers said.

The weighted index on the Taiwan Stock Exchange closed up 17.53 points, or 0.19 percent, at 8,948.10, after moving between 8,898.30 and 8,978.52 on turnover of NT$107.03 billion (US$3.57 billion).

The market opened up 0.38 percent and rose to the day's high in the wake of a rebound staged by Wall Street as the minutes of the U.S. Federal Reserve's last policymaking meeting indicated that it will continue to pump funds into the market to support the market, the dealers said.

After the index moved closer to the nearest technical resistance ahead of 9,000 points, profit taking set in to push the index down into the red, but bargain hunters then turned active to pick up large-cap stocks to erase all of the losses at the close, they said.

"Judging from today's fluctuations, I suspect that the local market got strong short-term support at the 5-day moving average at around 8,900 points for the moment," Hua Nan Securities analyst Kevin Su said. "However, it will not be easy for the local equity market to take off, as the technical hurdles ahead of 9,000 points are very high."

TSMC Expected to Report Upbeat Q1 Sales

Among the stocks that got a boost from the late session bargain hunting to leave their earlier losses behind, TSMC, the most heavily weighted stock in the local market, gained 0.42 percent to close at NT$119.50, off an early low of NT$118.50, as investors had high hopes that the contract chip maker would report an impressive sales report for the first quarter.

Recovering from an early low of NT$85.70, Hon Hai, the world's largest contract electronics maker, added 0.35 percent to end at NT$86.80. Flat panel maker Innolux Corp. (群創光電) gained 0.87 percent to close at NT$11.60 after the company reported a roughly 50 percent month-on-month increase in sales for March.

However, smartphone camera lens supplier Largan Precision Co. (大立光電) fell 0.91 percent to close at NT$1,625.00 as investors locked in gains they had built up in recent sessions.

In the financial sector, Cathay Financial Holding Co. (國泰金控) gained 1.80 percent to close at NT$45.25 and Fubon Financial Holding Co. rose 1.21 percent to end at NT$41.80 after the two reported improving bottom lines for March.

Among the gaining cement stocks, Taiwan Cement Corp. (台灣水泥) added 3.58 percent to close at NT$49.50 and Asia Cement Corp. (亞洲水泥) gained 1.96 percent to end at NT$39.05, on hopes that China's urbanization policy will boost cement demand.

"The local market is expected to continue to consolidate in the short term and ample liquidity could prevent the index from any heavy losses," Su said.

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