Market ends above 9,100 points after good news from Wall Street
May 29, 2014, 12:06 am TWN
TAIPEI, Taiwan -- Shares in Taiwan moved higher and closed above the 9,100-point mark Wednesday as buying rotated to the financial sector, a laggard in the broader market, on the back of gains posted on Wall Street overnight, dealers said.
Select electronics heavyweights such as smartphone camera lens maker Largan Precision Co. (大立光), PC vendor Asustek Computer Inc. (華碩) and integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (ASE, 日月光) continued their momentum during the session, the dealers said.
The weighted index on the Taiwan Stock Exchange ended up 66.42 points, or 0.73 percent, at 9,121.71, after moving between 9,069.89 and 9,125.14, on turnover of NT$101.25 billion (US$3.36 billion). The closing level was the highest since Jan. 28 2011, when the index closed at 9,145.35.
The market opened up 0.18 percent as investors were encouraged by the rise on Wall Street, where the S&P index hit a record high due to an improvement in the U.S. economic data, the dealers said.
The local equity market picked up steam as bargain hunters rushed to pick up financial stocks, taking advantage of their relatively low valuations, while buying in the bellwether electronics sector continued to push the index even higher at the close, they said.
"Looking at the gains on Wall Street and on the local bourse, I think market sentiment at home and abroad has improved a lot, paving the way for a further upside," Mega International Investment Services Corp. analyst Alex Huang said.
"Even if the local bourse faces the nearest technical resistance level ahead of 9,200 points, a longer term uptrend remains intact," Huang said, referring to better economic data in Taiwan and in the U.S.
NDC Indicator Encouraging
Huang said the latest composite economic indicator released by the National Development Council a day earlier was encouraging, as the data flashed a green light, showing that the local economy remains stable.
He said better-than-expected April durable goods orders in the U.S. announced overnight also lent additional support to investor confidence. "That's why investors turned their attention to the financial sector, which has been in consolidation mode for some time. The local bourse was generally driven by rotational buying," Huang said.
In the financial sector, which closed up 1.33 percent, Fubon Financial Holding Co. added 1.54 percent to end at NT$42.75 and Mega Financial Holding Co. rose 1.43 percent to close at NT$24.85.
Huang said the high-tech sector remained stable, led by select heavyweights, with Largan up 1.51 percent at NT$2,015.00, ASE up 2.23 percent at NT$39.00 and Asustek up 3.02 percent at NT$324.00.
In the old economy sector, Nan Ya Plastics Corp. gained 0.75 percent to close at NT$67.10, while Formosa Plastics Corp. fell 0.13 percent to end at NT$77.70.
"The local bourse remains awash in liquidity and future gains could be mainly driven by ample funds," Huang said.
"But to jump over the technical hurdles ahead of 9,200 points, turnover should be maintained above NT$100 billion or even rise to about NT$120 billion," he said.