The TAIEX yesterday staged a technical rebound as non-tech stocks, led by petrochemicals and financials, moved higher, dealers said.
Petrochemicals gained following a robust rebound in global crude oil prices overnight, while bargain hunters continued to pick up financial stocks, which offset the impact of a downturn in select Apple Inc concept stocks, including camera lens supplier Largan Precision Co (大立光), they said.
Turnover remained moderate at less than NT$100 billion (US$3.34 billion) as many foreign institutional investors were away for the holidays, they said.
The weighted index ended up 64.76 points, or 0.62 percent, higher at 10,486.67 on turnover of NT$90.74 billion.
The market opened down 2.1 points on follow-through selling from a session earlier, but soon regained its footing to return to positive territory.
The strength continued in the mid-morning session and ran through the end of the day to help the weighted index stand well above the 10,400-point mark, the dealers said.
“Today’s gains were technical in nature as the mainboard remained in a consolidation mode, with many foreign institutional investors absent for the holiday,” Mega International Investment Services Corp (兆豐國際投信) analyst Alex Huang (黃國偉) said.
“It was not surprising that trading volume remained moderate without the participation of foreign investors,” he said.
Huang said the petrochemical sector, which closed up 2.43 percent, was driven by a two-and-a-half year high in international crude oil prices overnight after a pipeline explosion in Libya.
Among the advancers in the petrochemical sector, Formosa Petrochemical Corp (台塑石化) rose 4 percent to close at NT$117, Formosa Plastics Corp (台塑) added 2.6 percent to end at NT$98.50 and Nan Ya Plastics Corp (南亞塑膠) climbed 1.31 percent to close at NT$77.50.
“However, buying in these petrochemical stocks was largely a knee-jerk reaction to the Libya explosion and concerns over a global glut remain, so I think the gains will be short-lived,” Huang said.
In the financial sector, which ended up 0.71 percent, Cathay Financial Holding Co (國泰金控) rose 1.7 percent to close at NT$53.80 and CTBC Financial Holding Co (中信金控) gained 1.5 percent to end at NT$20.30.
“Shares of Largan and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) were still sluggish, or the broader market would have moved even higher today,” Huang said.
TSMC, the most heavily weighted stock in the local market, dropped 0.44 percent to end at NT$225 on thin trading of 12.49 million shares.
“Before foreign investors return in January, the local equity market is expected to remain quiet,” Huang said.
“If the rebound continues, I expect the weighted index to face strong technical resistance at around 10,550 points for the rest of the week,” he added.
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