As US market closes for holiday, local market ends up as buying rotates to non-tech stocks
February 19, 2014, 12:13 am TWN
TAIPEI--Shares in Taiwan closed higher Tuesday as rotational buying pushed up stocks outside the tech sector to keep the index above the previous close over most of the session, dealers said.
Turnover however remained thin, with the bellwether electronics sector in consolidation mode on a lack of fresh leads from the U.S. market, which was closed for a public holiday overnight, they said.
The weighted index of the Taiwan Stock Exchange closed up 36.68 points or 0.43 percent at the day's high of 8,556.23, off a low of 8,506.06. Turnover totaled NT$72.50 billion (US$2.39 billion).
The market opened up 0.13 percent and quickly consolidated as investors lacked cues from Wall Street, dealers said.
While select large-cap electronics stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), the most heavily weighted stock in the local market, were in the doldrums, the old economy and financial sectors attracted bargain hunters to lift the index before the close, they said.
"The local equity market moved in a narrow range. Due to no new indication from Wall Street, many investors preferred to stay on the sidelines, keeping the trading volume low," Hua Nan Securities analyst Stan Chang said.
"The silver lining was that an upside made by the market in Tokyo today lent some support to local shares, helping the index manage itself to stay above 8,500 points at the end of the session," he said.
Financial Sector Buying Emerges in Late Session
Chang said the late session buying in the financial sector, in particular in heavyweights like Cathay Financial Holding Co. (國泰金控) and Fubon Financial Holding Co. (富邦金控), served as one of the drivers for the index increase.
Cathay Financial rose 1.55 percent to close at NT$46.00, while Fubon Financial gained 1.30 percent to end at NT$43.00.
In the old economy sector, food product supplier Uni-President Enterprises Corp. (統一企業) added 1.42 percent to close at NT$50.00, and Asia Cement Corp. (亞洲水泥) rose 1.07 percent to end at NT$37.70.
Gourmet Master Co., which operates cafe and bakery chain 85∘C (85度C), closed up 7 percent, the maximum daily increase, at NT$218.00, after Bank of America Merrill Lynch raised its target price to NT$260 from NT$146.
"As many investors refrained from picking up electronics stocks, they parked their funds in the non-high tech sector to boost non-tech stocks," Chang said.
Among weakening tech stocks, TSMC, the world's largest contract chip maker, fell 0.46 percent to end at NT$108.00, and smartphone camera lens supplier Largan Precision Co. (大立光電) closed down 0.85 percent at NT$1,165.00.
MediaTek Inc. (聯發科), however, gained 1.05 percent to end at NT$433.50 after the integrated circuit designer raised its sales forecast for the first quarter after it completed a merger deal with MStar Semiconductor (晨星半導體) Inc. on Feb. 1.
"The local market is faced with strong technical resistance at around 8,600 points. Unless turnover expands to NT$100 billion or higher, it will be hard to jump over the technical hurdles," Chang said.