Local market mounts mild rebound amidst signs of US shutdown
CNATAIPEI--Shares in Taiwan staged a technical rebound on Tuesday from the losses seen a session earlier, but the gains were limited by concerns over a partial shutdown of the U.S. government, dealers said.
October 2, 2013, 12:09 am TWN
Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted local stock, posted gains to stabilize the broader market, while select old economy stocks, especially petrochemical companies, attracted bargain hunting, they said.
The weighted index closed up 13.15 points, or 0.16 percent, at 8,187.02, after moving between 8,172.79 and 8,222.38, on turnover of NT$66.57 billion (US$2.26 billion).
The market opened up 0.12 points and rose to the day's high as investors took cues from the gains posted by other regional markets, such as Tokyo and Singapore, which also rebounded from a day earlier, dealers said.
The local market, however, faced some profit-taking pressure to cap the upside at the end of the session after the index moved closer to the nearest technical resistance at around 8,200 points, they said.
“Amid fears over further volatility on Wall Street, it was no surprise that the local stock market staged only a limited recovery from yesterday's losses,” said Mega International Investment Services Corp. analyst Alex Huang.
“Local market sentiment has turned more cautious after yesterday's net sell by foreign institutional investors so that investors appeared reluctant to chase prices to push the index even higher for the moment,” Huang said.
Foreign Investors Overbought Over NT$4 Billion In Taiwan
On Monday, foreign institutional investors served as net sellers of NT$4.03 billion worth of local shares after a net buy of NT$7.85 billion recorded Friday. Tuesday's figure has not been disclosed yet.
“A partial government shutdown in the U.S. has imposed some psychological impact on investors' moods, causing them to hold a wait-and-see attitude for the moment,” Huang said.
Leading the broader market to go higher, TSMC, the world's largest contract chip maker, rose 1 percent to close at NT$101.50, while Hon Hai Precision Industry Co., the world's largest contract electronics supplier, fell 0.53 percent to end at NT$75.50.
Handset maker Compal Communications Inc. gained 7 percent, the maximum daily increase, to close at NT$46.50 after parent company Compal Electronics Inc. announced Monday it would acquire the remaining stake in the cellphone supplier starting Tuesday.
Compal Electronics, which owned a 47.78-percent stake in Compal Communications before the acquisition announcement, rose 3.47 percent to close at NT$22.35 on hopes that the buy-in deal will boost its handheld device sales and offset falling shipments in notebook computers.
In the old economy sector, Formosa Plastics Corp. gained 0.92 percent to close at NT$77.00, and Formosa Chemicals & Fibre Corp. rose 1.78 percent to end at NT$80.00.
“Turnover in the local market remained thin today also because many investors stayed on the sidelines, waiting for listed companies to release their sales data for September,” Huang said.
Huang said it is possible for the market to continue consolidation mode over the next few sessions.