Local market closes higher after buyers shift to tech stocks
July 23, 2014, 12:15 am TWN
TAIPEI--Shares in Taiwan closed higher Tuesday as buying rotated to select high-tech stocks such as personal computer firms and memory chip suppliers, but the index ended shy of the 9,500-point mark, dealers said.
The weighted index on the Taiwan Stock Exchange ended up 58.39 points, or 0.61 percent, at the day's high of 9,499.36, off an early low of 9,418.74. Turnover totaled NT$94.73 billion (US$3.16 billion) during the session.
Barrier at 9,500-point Level
"Technical resistance ahead of 9,500 points remains strong. Even if the index breaches that level briefly, it is likely to drop again and remain in consolidation mode over the next few sessions," Hua Nan Securities analyst Stan Chang said, adding the market is likely to see a near-term floor of around 9,400 points.
Despite the gains, turnover remained moderate as investors preferred to stay on the sidelines, looking for more clues about how the geopolitical conditions related to Ukraine and the Middle East would evolve, dealers said.
The market opened up 0.13 percent on follow-through buying from the previous session until some investors locked in their gains, which dragged the index into negative territory by mid-morning, dealers said.
Bargain hunters then turned active, picking up certain stocks in the PC industry with relatively low valuations, dealers said. This, coupled with interest in memory chips, in particular dynamic random access memory (DRAM) suppliers, helped vault the broader market back into positive territory by the close, dealers said.
"Buying interest rotated very fast as investors appeared reluctant to hold onto a stock too long amid uncertainty over the geopolitical situation. No one can be sure how these non-economic factors will play out," Stan Chang said.
He pointed out that the recent performance of the global equity markets, in particular Wall Street, has been influenced by unfavorable geopolitical developments.
"Many investors here fear that further volatility overseas will affect the local market," Chang said.
With many investors taking to the sidelines, turnover failed to expand and several market heavyweights remained in the doldrums, while follow-through buying rotated to some market laggards, Chang said.
Blue Chips Remain Slow