Old economy stocks boost local market
June 19, 2014, 12:00 am TWN
TAIPEI--Shares in Taiwan moved higher Wednesday as rotational buying focused on the old economy sector, which had lagged behind the broader market in the past week, dealers said.
While select high-tech stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電) and Hon Hai Precision Industry Co. (鴻海精密), remained resilient, the electronics sector as a whole was in consolidation mode, with investors pocketing gains built in recent sessions, they said.
Upward momentum on the overall market was limited to some extent by investor sentiment that turned cautious ahead of the conclusion of the U.S. Federal Reserve's two-day policymaking meeting Wednesday in Washington, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 39.33 points, or 0.42 percent, at 9,279.93, after moving between 9,204.35 and 9,316.64, on turnover of NT$127.93 billion (US$4.26 billion).
The market opened up 0.18 percent in the wake of the gains posted on Wall Street overnight, and momentum accelerated late in the session to vault the index above 9,300 points before some investors moved to the sell side at the close, dealers said.
"After the gains seen in recent sessions, the broader market is facing stiff technical resistance ahead of 9,300 points," Mega International Investment Services Corp. analyst Alex Huang said.
"Judging from today's movement, I think the electronics sector as a whole has lost its luster after a recent strong showing. That's why investors, who have plenty of liquidity, diverted their funds to the old economy sector," Huang said.
Electronics Sub-index Up 0.17%
The electronics sub-index closed up 0.17 percent, underperforming the broader market. The plastics and construction sector ended up 1.23 percent and 1.18 percent, respectively.
Among the gaining electronics heavyweights, TSMC, the most heavily weighted stock on Taiwan's market, rose 0.40 percent to close at NT$125.50, and Hon Hai, the world's largest contract electronics maker, gained 0.11 percent to end at NT$94.10.
Other electronics shares slid Wednesday. Largan Precision Co. (大立光電), a smartphone camera lens supplier to Apple Inc., fell 1.68 percent to close at NT$2,050.00 as investors locked in a 2.46 percent increase seen a day earlier.
Smartphone vendor HTC Corp. (宏達電) also trended lower, falling 3.97 percent to end at NT$133.00 amid growing fears that the company will report net losses for 2014 and 2015 because of stiff competition in the global smartphone market.