Local market ends up in spite of Taiwan's weighting cut
May 16, 2014, 12:05 am TWN
TAIPEI--Shares in Taiwan edged higher Thursday as late-session buying helped the index emerge from the red, even as equity index provider MSCI Inc. cut Taiwan's weighting, dealers said.
The weighted index on the Taiwan Stock Exchange ended up 5.49 points, or 0.06 percent, at the day's high of 8,880.65 on turnover of NT$71.52 billion (US$2.37 billion) after an early low of 8,839.44.
MSCI Move Has Little Impact
MSCI cut Taiwan's weighting in the MSCI Emerging Markets Index to 11.81 percent from 11.96 percent, while the weighting in the MSCI All Country Asia ex-Japan Index was reduced to 15.22 percent from 15.27 percent.
Taiwan's weighting in the MSCI All Country World Index remained unchanged at 1.28 percent.
"The adjustments were small. I do not expect the MSCI move to have an adverse impact on the broader market," Concord Securities analyst Kerry Huang said.
The market opened down 0.25 percent and fell to the day's low in the wake of losses posted on Wall Street overnight. As the index moved closer to the 8,800 point mark, however, some bargain hunters turned active to push up the broader market above the previous close, dealers said.
Turnover remained relatively low as many investors preferred to stay on the sidelines amid fears the market would encounter a major pullback ahead of strong technical resistance at around 8,900 points, they said.
"Technically speaking, the local market remained in consolidation mode as it lacked a mainstream sector to lead the index to jump over the high technical hurdles," Huang said.
"The bellwether electronics sector has been in the doldrums and needs some time to digest downward pressure down the road, making it hard for the market to take off for the moment," Huang said.