Local bourse rebounds; gains capped
CNATAIPEI -- Shares in Taiwan staged a rebound yesterday but the gains were capped in moderate trade as many investors stayed on the sidelines amid lingering concerns over the debt situation in the eurozone, dealers said.
February 28, 2013, 12:18 am TWN
Fears escalated that debt-ridden Italy could hold another round of elections after a vote the previous weekend failed to produce a clear majority in parliament, which could complicate the country's austerity measures to cut debt, the dealers said.
The weighted index closed up 17.08 points, or 0.21 percent, at 7,879.98, after moving between 7,873.29 and 7,912.85, on turnover of NT$74.67 billion.
The market opened up 0.07 percent and moved to the day's high in the wake of a recovering Wall Street overnight boosted by improving economic data and eased worries about a possible halt to the U.S. Federal Reserve's liquidity-easing measures, the dealers said.
However, after the index breached 7,900 points and moved toward 8,000 points, profit taking followed to limit the upside by the end of the session, they said.
“Despite Wall Street's comeback overnight, market sentiment remained haunted by Italy's election results, with many investors fearing that political uncertainty could compromise that country's efforts to lower its debt,” Hua Nan Securities analyst Henry Miao said.
“The overnight plunges in the major European markets such as France and Germany made investors here wary of the debt problems in the eurozone, driving many of them to the sidelines throughout the session,” Miao said.
Due to the moderate trading volume, many large-cap stocks failed to sustain their gains as investors were reluctant to chase prices, Miao said.
Hon Hai Precision Industry Co., which assembles iPhones and iPads for Apple Inc., closed unchanged at NT$81.70 off an early high of NT$82.50. The electronics sub-index closed up 0.53 percent, while the financial sub-index ended up 0.42 percent on a technical rebound from losses posted a session earlier.
Among the winning financial stocks, Fubon Financial Holding Co. added 1.91 percent to close at NT$40.20 and E. Sun Financial Holding Co. rose 1.43 percent to end at NT$17.75.
“The local bourse is still in a consolidation mode,” Miao said. “Unless turnover expands significantly, it will be hard for the weighted index to stand above the 8,000 point level.”
“In particular, as uncertainty over the financial crisis in Europe remains, the technical barriers ahead of 8,000 points seem to be even higher,” Miao said.
In the old economy sector, food maker Uni-President Enterprises Corp. gained 1.08 percent to close at NT$55.50, while Formosa Plastics Corp. lost 1.96 percent to end at NT$75.00.