Market extends gains on Wall Street rebound, ends days trade near 8,400
CNATAIPEI -- Shares in Taiwan posted gains Friday, extending their momentum from a session earlier as investors reacted positively to a technical rebound staged on Wall Street overnight, dealers said.
February 8, 2014, 12:06 am TWN
The bellwether electronics sector, led by large-cap stocks, closed up more than 1 percent, while buying in select old economy stocks also helped the broader market finish higher, they said.
Despite the gains, turnover was below NT$100 billion (US$3.30 billion), with many investors remaining cautious ahead of the release of United States January non-farm payroll data late Friday, dealers said.
The weighted index closed up 76.34 points, or 0.91 percent, at 8,387.35, after fluctuating between 8,356.93 and 8,409.03, on turnover of NT$95.85 billion.
The market opened up 0.88 percent as the high-tech sector attracted bargain hunters after a recent slump, and buying spread to the old economy sector to send the index above the 8,400-point level a few times during the session.
But buying interest was not sustained in the last hour of the session, limiting the gains at the close, dealers said.
“Today's upturn largely followed the gains posted on Wall Street overnight,” KGI Securities analyst Eason Lee said. “The gains in the local bourse were simply technical in nature (after Wednesday's 2.34 percent plunge).”
“The market still needs some time to consolidate before entrenching itself above 8,400 points, where technical resistance is strong,” he said.
The limited trading volume was evidence that many investors preferred to stay on the sidelines ahead of the release of the U.S. job data, Lee said.
The employment numbers will serve as an important indicator of whether the Federal Reserve will continue to wind down its stimulus measures.
In the electronics sector, Taiwan Semiconductor Manufacturing Co. (TSMC), among other large-cap high-tech stocks, rose 1.96 percent to NT$104.00.
TSMC is the most heavily weighted stock in the local market, and its gains helped drive the broader market higher.
Advanced Semiconductor Engineering Inc., the world's largest integrated circuit packaging and testing services provider, gained 5.19 percent to close at NT$28.40 on speculation that the company has secured orders for Apple Inc.'s iWatch production.
Metal casing supplier Catcher Technology Co. added 5.77 percent to close at NT$220.00 after the company reported record high net income for 2013 on solid demand for mobile devices.
In the non-high tech sector, Wei Chuan Foods Corp. gained 2.40 percent to close at NT$49.15, while Cathay Financial Holding Co. rose 1.81 percent to end at NT$45.00, and Yuanta Financial Holding Co. gained 1.25 percent to close at NT$16.20.
“Despite the rebound on Wall Street overnight, the U.S. market is likely to encounter further volatility. So I expect investors here will remain cautious to limit the uptrend in the local index in the short term,” Lee said.