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Local market ends higher as buying rotates to financials

TAIPEI--Shares in Taiwan closed higher Tuesday as buying rotated to the financial sector amid hopes that companies in the sector were more profitable in the first half of the year, dealers said.

The weighted index on the Taiwan Stock Exchange ended up 10.78 points, or 0.11 percent, at 9,530.98, after moving between 9,499.17 and 9,540.57, on turnover of NT$100.33 billion (US$3.36 billion).

High-tech Heavyweights Suffer

The gains posted by financial heavyweights helped the market offset the losses suffered by large-cap high-tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), as investors decided to pocket recent gains, they said.

The market opened down 5.02 points and fell to the day's low in the wake of the losses posted on Wall Street overnight, with the electronics sector dragging the index down.

But the financial sector then gained strength to lend support to the broader market, helping the index close in positive territory, dealers said.

"The narrow range of movement today showed that many investors have turned wary of the market's prospects since the index breached the 9,500-point mark last week," President Securities analyst Vickie Hsieh said.

"Such caution has been more visible in the bellwether electronics sector, which had served as the driver of the recent gains on the broader market," Hsieh said. "Select high-tech stocks, in particular semiconductor firms, have appeared a bit expensive."

TSMC, the most heavily weighted stock in the local market, fell 1.10 percent to close at NT$134.50, and integrated circuit designer MediaTek Inc. (聯發科) lost 1.69 percent to end at NT$522.00, although optimism toward the global IC market for the second half of the year remained in place.

ASE Q2 Revenues Hit New High

Advanced Semiconductor Engineering (ASE,日月光半導體) yesterday posted revenues of NT$13.13 billion and NT$39.27 billion for June and the second quarter, which are the third highest monthly record and the highest quarterly result.

ASE Chief Operating Officer Tien Wu (吳田玉) earlier said it is optimistic about its business prospects for the second half of 2014 as current demand for IC backend services is still outpacing the industry's supply capacity.

ASE's shareholders earlier have approved the company's plans to deliver a cash dividend of NT$1.3 for 2013, in which net profits total NT$15.69 billion or NT$2.09 per share.

Asustek Computer Inc. (華碩電腦) shed 2.84 percent to close at NT$342.00, off an early low of NT$327.50, after the personal computer vendor reported lower-than-expected brand sales for the second quarter.

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