Local market edges up as investors lock in earlier gains
May 14, 2014, 12:08 am TWN
TAIPEI, Taiwan -- Shares in Taiwan closed slightly higher Tuesday as investors pocketed earlier gains, with the index moving closer to the nearest technical resistance level at around 8,900 points, dealers said.
Market sentiment remained cautious about the current earnings reporting season in Taiwan, which prompted investors to largely ignore a record high on Wall Street overnight, the dealers said.
Large-cap Stocks Buoy Market
While the broader market still moved in consolidation mode, select large-cap stocks, in particular Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), attracted buying on healthy fundamentals to lend some support the index at the close, they said.
The weighted index on the Taiwan Stock Exchange ended up 9.33 points, or 0.1 percent, at 8,817.94, after moving between 8,809.06 and 8,886.66 on turnover of NT$87.45 billion (US$2.90 billion).
The market opened up 0.65 percent and rose to the day's high as investors took cues from gains posted on Wall Street overnight, where the Dow Jones Industrial Average and the S&P 500 index hit record highs, the dealers said.
However, the gains were capped as the market encountered technical resistance ahead of 8,900 points, with profit-taking selling seen almost across the board until the end of the session, they said.
"During the current earnings reporting season, investors tended to keep alert so that they appeared reluctant to chase prices and even rushed to take profits," President Securities analyst Vickie Hsieh said.
Market Enters Consolidation Mode
"The 8,900 point mark continued to impose a psychological impact on many investors, keeping the index from jumping over the technical hurdles," Hsieh said.
"With the 8,900 point level a technical barrier, I expect the local market to continue to move in a narrow range. If there is any immediate pullback, the index is likely to see support at around 8,600 points," Hsieh said.
In the non-high-tech sector, food maker Uni-President Enterprises Corp. (統一企業) added 0.40 percent to end at NT$50.80, while Formosa Plastics Corp. (台塑工業) fell 0.13 percent to close at NT$76.90. Fubon Financial Holding Co. (富邦金控) ended 1.0 percent lower at NT$39.45.
Acer Inc. (宏碁股份), a Taiwan-based PC manufacturer, shed 0.52 percent to end at NT$19.10 after the company reported that its consolidated sales for April fell 37.47 percent from March to NT$19.25 billion, a new low in more than two years.
TSMC Rises 1.69% to NT$120.5
However, TSMC, the most heavily weighted stock in the local market, rose 1.69 percent to close at NT$120.50, while Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics maker, gained 0.23 percent to end at NT$87.90.
"Without the strength of TSMC, the index would have fallen below the previous close. Investors have high hopes that the chip maker will continue to report record highs in sales and earnings in the second quarter," Hsieh said.
HannStar Display Corp. (瀚宇彩晶) rose 1.81 percent to close at NT$11.25 after the small- and medium-sized flat panel supplier reported the highest earnings per share among its peers on strong demand for smartphones worldwide.
Quanta Computer Inc. (廣達電腦), the world's largest contract notebook computer maker, fell 0.50 percent to close at NT$79.80, underperforming the broader market, ahead of an investor conference scheduled for after the market close to release the first-quarter results.