Taiwanese shares closed slightly higher yesterday as buying emerged late in the trading session, helping the broader market recoup its earlier losses and return to positive territory, dealers said.
The late buying focused on large-cap stocks such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Formosa Plastics Corp (台塑) and Cathay Financial Holding Co (國泰金控) in the electronics and old economy sectors, dealers said.
Turnover remained thin as many investors stayed on the sidelines, closely watching the movement of international crude oil prices, which could send ripples through equity markets worldwide, including Taiwan, dealers said.
The weighted index closed up 10.57 points, or 0.13 percent, at 8,292.74, after moving between 8,261.72 and 8,316.44. Turnover totaled NT$76.86 billion (US$2.32 billion).
The market opened up 0.86 points and rose to the day’s high as investors picked up shares, taking cues from a rebound on Wall Street, where the Dow Jones Industrial Average closed up 0.72 percent on Monday, dealers said.
However, after the index breached the 8,300 mark, selling set in, pushing the broader market into the red before late buying lifted the index higher, dealers said.
“Judging from the gains posted by the large-cap stocks late in the trading session, I suspect that foreign institutional investors were the main buyers since they kept a number of long position contracts in the local futures market,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
Foreign institutional investors held about 13,000 in net long position contracts as of Monday, Tang said.
“Foreign investors were simply hunting for large-cap stocks like TSMC to boost the spot market in a bid to profit in the futures market,” Tang said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$1.56 billion of shares yesterday.
TSMC, the most heavily weighted stock on the local market, was boosted by last-minute buying of about 5 million shares, Tang said.
Recovering from an early low of NT$140.50, TSMC rose 0.4 percent to close at NT$142, with 17.13 million shares changing hands.
Formosa Plastics gained 0.8 percent to close at NT$73, off an early low of 72.10. Nan Ya Plastics Corp (南亞) rose 0.7 percent to end at NT$58.60, off an early low of 58, and Cathay Financial added 0.6 percent to close at NT$43.35, recovering from an early low of 43.
Bucking the upturn of the broader market, DRAM chipmaker Nanya Technology Corp (南亞科) fell by the maximum daily limit of 10 percent to close at NT$51.80 after reporting a 71.39 percent year-on-year drop in net profit last month.
“Although the broader market ended in positive territory on the gains posted by large-cap stocks, turnover remained low,” Tang said. “Many investors appeared reluctant to raise their holdings amid fears over volatility in global financial markets.”
Since international crude oil prices in London dipped to an 11-year low on Monday, “market sentiment has turned very cautious amid deepening concerns about Middle East funds cutting their holdings of global equities to offset the effects of falling oil prices,” Tang said.
Yesterday’s low trading volume also reflected political uncertainty ahead of the presidential and legislative elections on Jan. 16, he said.
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