Local shares close higher in wake of gains posted on Wall Street
April 18, 2014, 12:31 am TWN
TAIPEI--Shares in Taiwan closed higher yesterday in the wake of gains posted on Wall Street overnight, amid eased fears that the U.S. Federal Reserve will hike interest rates sooner than the market has expected, dealers said.
Select Apple concept stocks, including Hon Hai Precision Industry Co. (鴻海精密) and Catcher Technology Co. (可成科技), extended their momentum to push up the index, while the financial sector benefited from bargain hunting to lend support to the broader market, the dealers said.
However, Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, underperformed the market amid cautious sentiment ahead of an investor conference scheduled to open after the market closed, they added.
The weighted index on the Taiwan Stock Exchange ended up 20.34 points, or 0.22 percent, at 8,944.16, after moving between 8,921.56 and 8,962.66, on turnover of NT$94.93 billion (US$3.14 billion).
The market opened up 0.21 percent in a knee-jerk reaction to the Wall Street uptrend, and buying increased to push the index up closer to the nearest technical resistance level at 9,000 points before profit taking emerged to cap the gains at the close, they said.
"As the technical hurdles have been high, the market remained in consolidation mode and needs some time to digest downward pressure before challenging the 9,000 point mark," Concord Securities analyst Kerry Huang said.
Taiwan Life Plumets on Buy-out Rumor
Huang said a higher Wall Street served as a catalyst to buying after Fed Chairwoman Janet Yellen said in a speech that the U.S. central bank will keep interest rates low for some time even after it ends its monthly bond-buying program.
"It was no surprise that the local market followed the U.S. market's step to move higher, with buying focusing on certain high-tech stocks in the Apple supply chain amid hopes that the launch of the next generation of the iPhone will boost shipments," Huang said.
In the financial sector, Cathay Financial Holding Co. (國泰金控) rose 0.46 percent to close at NT$44.05 and Mega Financial Holding Co. (兆豐金控) gained 0.42 percent to end at NT$23.80.
However, Taiwan Life Insurance Co. (台灣人壽) fell 7 percent, the maximum daily decline, to close at NT$24.45 amid fears that a buyout deal in which CTBC Financial Holding Co. (中信金控) will acquire the life insurer is going to fall apart.
Hon Hai gained 0.46 percent to close at NT$87.90, with 24.50 million shares changing hands. Hon Hai, which assembles iPhones and iPads for Apple, generates about 40 percent of its total sales from the U.S. client.
Market to Dance to TSMC's Q2 Guidance
TSMC, on the other hand, fell 0.83 percent to NT$120.00 before the release of its first-quarter results. The losses also reflected a 1.76-percent drop in TSMC's American depositary receipts on Wall Street overnight.