TAIEX keeps momentum in year's final session
By Ted Chen, The China Post
January 1, 2014, 12:15 am TWN
TAIPEI, Taiwan -- Following a spirited start after the opening bell, the TAIEX closed at 8,611.51 points, down 11.9 points while maintaining intraday momentum at above the NT$80 billion benchmark, yesterday, the final day of trading this year before activities resume on Thursday, Jan. 2, 2014,.
The index yesterday morning surged to the intraday high of 8,647 points, but began dwindling steadily, reaching a low of 8,594 points before a rally to 8,611 points just before the closing bell.
Although yesterday's market performance did not exceed Monday's results, which saw a spirited 88-point rally that propelled the index to 8,623 points on volume of NT$85 billion, market observers commented that yesterday's trading concluded on a solid note following a three-day streak of expanding trading volume. As the market has already seen consecutive gains towards the final days of this year, the index is well-positioned to take higher ground in January.
Sources close to the industry stated that a number of foreign institutional investors elected to keep their trading desks manned to capitalize on the year-end momentum while most of the staff was sent on holiday leave. During Monday's session, a number of Taiwan's blue chip stocks saw heavy buying, including TSMC, which recorded a single buy order for 12.19 million shares, and a more than one million share buy order for Fubon Financial Holding Co. (富邦金) and Cathay Financial Holdings Co. (國泰金), most likely the work of heavyweight foreign institutional investors, according to market observers.
Market commentators also stated that the year-end market surge is aimed at disrupting the efforts of bearish sentiments, whose short orders may be impaled on price spikes observed throughout the index.
"After the weighted index pushed above 8,600 points yesterday to close at a more than two-year high, the market faced stiff technical resistance. It was not surprising that share prices encountered some selling today," Mega International Investment Services Corp. analyst Alex Huang told the Central News Agency (CNA).
"But the market remained resilient as it has become technically healthier after solid buying in recent sessions," Huang said, referring to the fact that the index managed to close above the 8,600-point level for the second consecutive day.
Huang said the electronics sector fell into consolidation mode as investors locked in their recent gains and focused their selling on large-cap stocks. "As these heavyweights turned weaker, the broader market suffered," he said.
The Year in Retrospect and Outlook Ahead
Over the course of 2013, the TAIEX gained 912.01 points, up 11.84 percent. Most notably, the index in the fourth quarter of last year gained 438 points, up 5.3 percent, with foreign institutional investors reportedly sharing an upbeat outlook throughout January.