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Local market ends up after volatile session

TAIPEI, Taiwan -- Shares in Taiwan closed higher Wednesday after a choppy session in which the benchmark index was first dragged down by technical resistance and then rebounded on late-session buying, dealers said.

Thanks to large-cap electronics stocks, in particular Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) which maintained its momentum throughout the session, the local market resisted downward pressure that was seen among non-high tech stocks, they said.

The weighted index on the Taiwan Stock Exchange closed up 43.04 points, or 0.45 percent, at 9,484.96, after moving between 9,421.87 and 9,547.05, on turnover of NT$150.85 billion (US$5.05 billion).

The market opened up 0.42 percent in a knee-jerk reaction to the gains posted on Wall Street overnight, and rose further to breach the 9,500-point mark before investors cashed in gains to pull the index into negative territory at one point, dealers said.

However, TSMC and other electronics heavyweights, like flat panel maker Innolux Corp. (群創光電), withstood the pressure and sustained upward momentum, helping the broader market vault back into positive territory at the close, they said.

9,500-point Technical Barrier

"The 9,500-point mark represents a high technical barrier. I am not surprised that selling emerged during the session to limit the gains," Mega International Investment Services Corp. analyst Alex Huang said.

Huang said many investors have become wary of market movements in the near term after the market's recent bullish showing because of fears of a potential pullback, and they decided to play it safe on Wednesday and sell off some of their holdings.

"Fortunately, the local market had TSMC and other large-cap stocks, and their gains helped stabilize the broader market," Huang said.

Innolux gained 6.60 percent to end at NT$15.35 on hopes that the company will benefit from higher screen prices in the third quarter, a traditional peak season in the industry.

Among the other winning electronics stocks, Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics maker, added 0.98 percent to close at NT$103.00, and integrated circuit designer MediaTek Inc. (聯發科) rose 1.97 percent to end at NT$518.00.

Bucking the uptrend on the broader market, Taiwan Cement Corp. (台灣水泥) fell 1.73 percent to close at NT$45.40, and Eclat Textile Co. (鴻儒企業) shed 1.29 percent to end at NT$343.00.

Whether the index will continue to move higher depends on the performance of the global equity markets, in particular Wall Street, Huang said.

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