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Construction share gains lead way as index edges higher

Shares ended slightly higher yesterday led by gains in construction stocks, with the market turning cautious as the main index neared the 6,000 mark, analysts said.

The TAIEX ended 20.92 points, or 0.4 percent, higher at 5,970.18.

A total of 453 stocks finished the session higher, while 193 closed lower and 175 were unchanged. Trading was valued at NT$85.43 billion (US$2.52 billion).

"Investors are a bit cautious as the index is so close to the critical level of 6,000," said Maggie Chien, an investment consultant at Capital Investment Management Co (群益投顧).

Construction stocks were the best performers yesterday, up 3.1 percent as a whole. Local construction firms typically launch more new housing projects at the end of September, one of the two busiest seasons during the year. Kuoyang Construction (國揚) jumped 6.9 percent to NT$9.25, while Cathay Real Estate (國泰) gained 2.1 percent to NT$19.5.

Financials gained a slim 0.3 percent overall.

"Some investors quickly pocketed their gains on financial stocks after Tuesday's rally, which offset continued buying in non-tech shares," said Yaoren Chang, an analyst at Grand Cathay Securities (大華證券).

Chang said financial stocks will be supported by expectations that the local central bank will follow the US rate hike.

Taishin Financial Holding (台新金控) lost 1.1 percent to NT$27.9. First Financial Holding (第一金控) was down 0.4 percent at NT$25.9, after rising 4 percent in the previous session. Steel stocks jumped on hopes that global demand for steel products will continue to grow. China Steel (中鋼) rose 2.1 percent to NT$34.7.
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