The TAIEX yesterday extended its momentum from a session earlier, as buying in the financial sector continued to help the broader market recoup earlier losses and return to the 9,000-point mark, dealers said.
Despite the gains, market sentiment was cautious, as investors feared that the market would suffer a pullback due to stiff technical resistance as the index moved closer to 9,100 points, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 26.66 points, or 0.3 percent, at the day’s high of 9,034.87, off an early low of 8,972.83, on turnover of NT$94.74 billion (US$2.96 billion).
The market opened up 0.12 percent on follow-through buying from Monday, when the local main board breached 9,000 points for the first time in almost a year, and the initial gains also reflected an all-time high on Wall Street overnight, the dealers said.
However, some investors shifted to the sell side, dumping select large-cap electronics stocks, such as smartphone camera lens maker Largan Precision Co (大立光), to push the index into negative territory before buying re-emerged, focusing on the financial sector and certain old economy stocks to push the index up to the day’s high at the close, they said.
“Compared with the electronics sector and the broader market, the financial sector appeared attractive in terms of valuations,” Mega International Investment Services Corp (兆豐證券) analyst Alex Huang (黃國偉) said. “Foreign institutional investors started to chase financial stocks in the second half of last week, and the buying continued today.”
In the financial sector, which closed up 0.73 percent, Fubon Financial Holding Co (富邦金控) rose 2.03 percent to end at NT$40.25, while Cathay Financial Holding Co (國泰金控 ) gained 0.95 percent to close at NT$37.30.
“It seems that investors became upbeat about financial stocks’ operations after several banking giants on Wall Street reported better-than-expected earnings for the second quarter, while the global economy remained weak,” Huang said.
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