The TAIEX closed higher and breached 8,000 points yesterday as further fund inflows helped the market overcome stiff technical resistance at that level, dealers said.
Sentiment improved after finance ministers in Europe agreed to bail out debt-ridden Greece to help it avoid an immediate default, they said.
Select high-tech stocks remained the focus of institutional buying, in particular the firms in Apple’s global supply chain, on expectations that the launch of the iPad 3 and the iPhone 5 later this year will further strengthen their profitability, they said.
In addition, the financial sector attracted interest as investors embraced hopes that the government will come up with more incentives to boost business exchanges across the Taiwan Strait, dealers said.
The TAIEX finished up 80.18 points, or 1.01 percent, at 8,001.68, on turnover of NT$147.75 billion (US$4.99 billion).
The market opened down 0.3 percent and moved to the day’s low on follow-through selling after a lackluster performance on Wall Street overnight, dealers said.
However, after the index fell below 7,900 points, bargain hunters, sitting on ample liquidity, turned active and led the broader market to return to positive territory by the end of the session.
“Look at the expanded turnover. I think buying, in particular from foreign institutional investors, increased to vault the index past the 8,000 point mark,” Horizon Securities (宏遠證券) analyst Benson Huang (黃重善) said.
“After consolidating in the past few sessions, the market has digested most of the selling ahead of the psychological level,” Huang said. “The market has become technically healthier.”
With more funds entering the bourse, share prices are likely to head higher in the near future, Huang said.
During the session, the high-tech sector drove the latest gains, with interest still highlighting “Apple concept stocks” — that is, stocks in the supply chain of the US consumer electronics giant, the analyst said.
Among the suppliers to Apple, metal casing manufacturer Foxconn Technology Corp (鴻準) gained 7 percent, the maximum daily increase, to close at NT$136, and rival Catcher Technology Corp (可成) rose 4.02 percent to end at NT$207.
TPK Holding Co Ltd (宸鴻), a touch panel supplier to Apple, reversed its early losses, closing up 0.51 percent at NT$493.50, although the company reported lower-than-expected earnings for the fourth quarter.
The construction sector scored the highest gains among the eight largest sectors of the market, finishing up 1.77 percent. Machinery and electronics rose 1.23 percent, paper and pulp stocks added 1.21 percent, financials gained 1.03 percent and the cement sector closed up 0.97 percent.
Textiles rose 0.51 percent, plastics and chemicals gained 0.5 percent and foodstuffs closed up 0.24 percent.