Sun, Oct 15, 2017 - Page 14 News List

TAIEX rebounds on late buying to make up losses

‘GOLDILOCKS’:Expectations of rapid global growth helped stocks in the Asia-Pacific region advance, with Japan’s Nikkei 225 rising 1 percent to hit a 21-year high

Staff writer, with CNA and Reuters

Local shares on Friday closed marginally higher as buying emerged late in the trading session, helping the market recoup early losses to remain above the 10,700-point mark, dealers said.

Underperforming the broader market, Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, was under pressure throughout the session because of uncertainty over its sales for next month, they said.

The TAIEX on Friday closed up 12.65 points, or 0.12 percent, at the day’s high of 10,724.09 — an increase of 1.8 percent from a close of 10,532.81 on Oct. 6 — after hitting a low of 10,675.83, on turnover of NT$121.11 billion (US$4.01 billion).

The market opened up 1.04 points on follow-through buying from a session earlier, but soon lost its footing as selling emerged in the bellwether electronics sector, in particular select Apple concept stocks, including Largan, dealers said.

Investors shifted to the buy side, picking up certain high-tech bargains, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密), to help the weighted index close higher at the end, they said.

“The electronics sector retained a dominant role in the local stock market after making up about 70 percent of the total turnover on Friday,” Concord Securities Co (康和證券) analyst Kerry Huang said.

“During most of the session, when high-tech stocks generally remained in the doldrums, the broader market appeared weak, but buying late in the trading session served as a boost to the market as a whole,” Huang said.

Among the electronics stocks that left early losses behind, TSMC, the most heavily weighted stock on the local market, closed unchanged at the day’s high of NT$237.50 after hitting an early low of NT$234.50, with 23.10 million shares changing hands.

Off an early low of NT$107, Hon Hai, second to TSMC in terms of market capitalization, ended at NT$108 on trading volume of 25.86 million shares.

“Largan’s losses affected market sentiment toward some other Apple suppliers during most the trading session,” Huang said.

“Those stocks were hit by worries that shipments of Apple’s premier iPhone X model will be delayed after Largan on Thursday said it remains unclear about its sales outlook for next month,” Huang added.

Largan fell 1.51 percent to close at NT$5,550, although the company reported third-quarter net profit that was up 60 percent from a quarter earlier and a gross margin that was up 1.2 percentage points sequentially.

Catcher Technology Co (可成科技), a metal casing supplier to Apple, also lost 2.5 percent to end at NT$312.50.

In the petrochemical sector, Formosa Plastics Corp (台塑) lost 1.16 percent to close at NT$93.50, while Nan Ya Plastics Corp (南亞塑膠) fell 1.07 percent to end at NT$74.20 after a fall in international crude oil prices.

Among the financial stocks, Cathay Financial Holding Co (國泰金控) rose 0.31 percent to close at NT$49.15, while Fubon Financial Holding Co (富邦金控) gained 0.42 percent to end at NT$47.65.

“After the weighted index breached the 10,700-point mark, the market has become technically stronger. So the market is expected to consolidate for a while before moving even higher the rest of the year,” Huang said.

However, investors should keep a close eye on the ongoing earnings season on Wall Street, which could move other markets in the world, Huang said.

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