Local market ends up as high-priced stocks soar
April 23, 2014, 12:08 am TWN
TAIPEI--Shares in Taiwan closed higher Tuesday as high-priced stocks in the bellwether electronics sector steamed ahead in the wake of gains posted by high-tech stocks in the U.S. market overnight, dealers said.
Among the high-priced stocks, Largan Precision Co. (大立光電), a Taiwan-based smartphone camera lens supplier, got a boost from hopes that the company will report good earnings results for the first quarter in an investor conference scheduled for later in the week.
Asustek Computer Inc. (華碩電腦) also rose sharply higher after Barclays Capital raised a target price on the stock amid optimism toward its efforts to diversify its product portfolio by boosting visibility in the smartphone market, the dealers said.
The weighted index on the Taiwan Stock Exchange ended up 23.52 points, or 0.26 percent at 8,974.71, after moving between 8,955.19 and 8,989.06 on turnover of NT$86.93 billion (US$2.87 billion).
9,000-point Mark a Psychological Hurdle
The market opened up 5.03 points and momentum continued, with select electronics stocks in focus, pushing the broader market higher, the dealers said. But as the index moved closer to the 9,000-point mark, some investors locked in their earlier gains to cap the uptrend at the close, they said.
"The 9,000-point mark has imposed a psychological impact on many investors who fear that a major pullback will follow after the index breaches that level," Grand Fortune Securities analyst Chen Wei-tai said.
"It came as no surprise that investors tended to pocket their gains as the index moved higher in a bid to keep as much cash on hand as possible for the moment, and the selling compromised the gains posted by certain high-priced stocks," Chen said.
Largan rose 6.52 percent to close at NT$1,715.00 as investors embraced high hopes that the firm will come up with positive leads in the upcoming investor conference. Largan remained the most expensive stock in the local market.
Bank of America Merrill Lynch said Largan will report NT$16.36 in earnings per share for the first quarter, up from NT$13.79 recorded in the same period of last year, but down from NT$25.38 registered in the fourth quarter on slow-season effects.
Due to its major clients' efforts to launch new smartphone models, Largan is expected to post a 25-percent sequential increase in sales for the second quarter to NT$8.6 billion, the brokerage said.
Asustek Target Price Up Over 17%
Asustek added 4.47 percent to end at NT$327.50 after Barclays Capital raised its target price on the stock from NT$340 to NT$400, the highest among the foreign brokerages that track the PC vendor.