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May 26, 2017

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Market recoups losses, closes at 9,143.97 points

TAIPEI--Shares in Taiwan recovered from early losses to edge higher at the close on Wednesday after select large-cap electronics stocks bounced back from big declines a session earlier, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 2.53 points, or 0.02 percent, at 9,143.97, after moving between 9,070.09 and 9,163.81, on turnover of NT$105.53 billion (US$3.52 billion).

Ukraine a Wild Card

"In the short term, the local market could move between 9,050 points and 9,350 points," Taishin Securities Investment Consultant analyst Tony Huang said.

"Investors should keep a close eye on the geopolitical situation related to Ukraine, which could spook global equity markets, including Taiwan's," he cautioned.

The market opened 6.92 points higher and rose to the day's high on a mild technical rebound before selling emerged to pull the index into negative territory amid lingering worries over the petrochemical sector's future after the Kaohsiung blasts, dealers said.

As the index moved toward the 9,000-point mark, the nearest point of technical support, bargain hunters turned active and snapped up blue chips in the electronics sector and some financial stocks, helping the market regain its footing, they said.

"Although the market still needs time to consolidate, it seemed that much of heavy downward pressure has been digested," Huang said, referring to the comeback made by certain high-tech blue chips, which remain fundamentally sound.

TSMC Lends Support

Taiwan Semiconductor Manufacturing Co. (TSMC,台灣積體電路), the most heavily weighted stock in the local market, rose 0.84 percent to close at NT$120.50 after a 3.24 percent drop seen a day earlier.

Hon Hai Precision Industry Co. (鴻海精密工業), which assembles iPads and iPhones for Apple, rebounded from a 3.32 percent drop on Tuesday to gain 1.47 percent and close at NT$103.50.

Integrated circuit designer MediaTek Inc. (聯發科) added 3.29 percent to close at NT$503.00 after Tuesday's 1.02 percent decline.

Catcher Technology Co. (可成科技) rose 2.96 percent to end at NT$260.50 after the metal casing supplier reported an improvement in consolidated sales for July, while smartphone camera lens maker Largan Precision Co. (大立光電) recovered from early losses to close up 0.65 percent at NT$2,323.00 on strong July sales.

Financials Back on Feet

Bargain hunting also emerged in the financial sector as financial heavyweights attracted buying to lend further support to the broader market, which was dragged down on Tuesday by concerns over the impact of a series of deadly gas explosions in Kaohsiung last week, they said.

Huang said the financial sector was hit hard Tuesday by fears that the petrochemical companies affected by the Kaohsiung explosions might have trouble repaying their bank loans.

"The selling in the sector yesterday was excessive. After investors turned calmer today, they tended to pick up bargains," Huang said.

Among the rebounding financial stocks, Cathay Financial Holding Co. (國泰金控) gained 2.21 percent to close at NT$48.60, and Fubon Financial Holding Co. (富邦金控) added 1.57 percent to end at NT$45.25.

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