Local market mostly consolidates, Apple concept stocks steam ahead
June 7, 2014, 12:06 am TWN
TAIPEI -- Shares in Taiwan closed relatively flat Friday as investors remained cautious ahead of the release of non-farm payroll data for May in the United States later in the day, dealers said.
While the broader market was in consolidation mode, select high-tech stocks, and in particular "Apple concept stocks," posted gains.
They were led by smartphone camera lens supplier Largan Precision Co. (大立光), which reported a record high in consolidated sales for May.
The cement sector also attracted bargain hunters on hopes that large-cap stocks, such as Taiwan Cement Corp. (台泥), will benefit from rising shipments in China in the second quarter, dealers said.
The weighted index on the Taiwan Stock Exchange closed down 6.26 points, or 0.06 percent, at 9,134.46, after fluctuating between 9,122.56 and 9,174.77, on turnover of NT$112.20 billion (US$3.74 billion).
ECB Rate Cut
The market opened up 0.30 percent and quickly rose to the day's high, spurred on by gains on Wall Street overnight after the European Central Bank (ECB) cut its key interest rate to a record low, dealers said.
Interest in Taiwanese suppliers to Apple also helped drive the index closer to the nearest level of technical resistance around the 9,200 point mark, but selling then set in to drag the broader market into negative territory at the close, they said.
"The ECB's rate cut was widely expected. So investors quickly shifted their attention to the May jobs report in Washington, which could hint at how the U.S. Federal Reserve will adjust its monetary policy in the near future," Hua Nan Securities analyst Stan Chang said.
"It was no surprise that downward pressure set in as the index moved closer to 9,200 points, keeping the local market within a narrow range. And this limited movement is expected to continue over the next few sessions," the analyst said.
Apple Concept Shares
Chang said the silver lining was that some Apple concept stocks steamed ahead to lend support to the broader market on hopes that the next generation of iPhones will give a boost to their sales.
Among the Apple suppliers gaining ground, Largan rose 3.02 percent to close at NT$2,045.00 on a record high in consolidated sales for May. Hong Kong-based CIMB Securities raised its target price for the stock to NT$2,650 from the previous NT$2,450 after the sales report.
Metal casing maker Catcher Technology Co. (可成) added 0.71 percent to end at NT$284.00 after its consolidated sales for May rose 3.5 percent from a month earlier and jumped 26.6 percent from a year earlier to NT$4.42 billion.
Taiwan Semiconductor Manufacturing Co. (台積電), the most heavily weighted stock in the local market, did not fare as well, falling 0.41 percent to close at NT$122.50, while integrated circuit designer MediaTek Inc. lost 1.38 percent to end at NT$500.
In the cement sector, Taiwan Cement rose 2.22 percent to close at NT$46.00 on market expectations that its shipments in China for the second quarter could rise 30 percent from a quarter earlier, Chang said.