Local shares on Friday closed slightly higher after the main board recovered its earlier losses on bargain hunting, pushing the TAIEX back into positive territory and helping the market remain above the 11,000-point mark at the end of the session, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, was the favorite of bargain hunters during the session, while buying in other select large-cap stocks also helped the broader market close above its previous closing level, they said.
The TAIEX on Friday ended up 9.25 points, or 0.08 percent, at 11,027.70, after moving between 10,933.46 and 11,054.86, on turnover of NT$165.97 billion (US$5.68 billion). That was an increase of 1.5 percent from a close of 10,864.82 on March 9.
The market opened down 8.21 points on follow-through selling from the previous session and downward pressure escalated, with market heavyweights in the bellwether electronics sector in focus as local investors were motivated by 0.2 percent losses incurred by the tech-heavy NASDAQ overnight, dealers said.
The weakness on the local main board continued until about 1pm, when bargain hunters turned active and began picking up TSMC shares, which had been under pressure with other large-cap stocks in the old economy sector, pushing the broader market back into positive territory by the end of the session, they said.
“Look at the expanded turnover. Late-session bargain hunting played an important role in boosting trading volume for the entire day and also helped the weighted index climb out of the previous weakness,” Concord Securities Co (康和證券) analyst Kerry Huang said.
“It seems that many investors remained bullish and willing to take advantage of the earlier losses on the weighted index, hoping the TAIEX will soon return to an upswing after recent consolidation,” Huang said.
TSMC’s rebound from its earlier heavy losses served as a driver for the comeback of the broader market, Huang added.
After hitting a low of NT$249.50, TSMC, the world’s largest contract chipmaker, closed unchanged at NT$255.00, with 62.9 million shares changing hands.
Shares in contract notebook computer manufacturer Compal Electronics Inc (仁寶) rose 0.97 percent to close at NT$20.80, off an early high of NT$20.45, also on the back of bargain hunting.
Nanya Technology Corp (南亞科技), the largest DRAM chipmaker in the nation, gained 3.52 percent to close at NT$94.20 after an IC Insights Inc research report said a day earlier that DRAM prices are expected to rise another 36 percent on average this year following an 81 percent increase last year, as demand continues to outstrip supply.
Shares in iPhone assembler Hon Hai Precision Industry Co (鴻海精密), second to TSMC in terms of market value, fell 0.64 percent to close at NT$92.80, while Largan Precision Co (大立光), a smartphone camera lens supplier to Apple Inc, shed 2.51 percent to end at NT$3,690.
Also bolstered by bargain hunters, Formosa Plastics Corp (台灣塑膠) closed unchanged at NT$102, off an early low of NT$100.50, while Formosa Chemicals & Fibre Corp (台塑化纖) ended up 2.8 percent at NT$110 after hitting a low of NT$106.50.
“Despite the gains, I remain concerned about the stiff technical resistance ahead of 11,270 points — the intraday high seen on Jan. 21,” Huang said.
“More important, possible volatility on Wall Street at a time of a rate hike cycle by the US Federal Reserve this year is expected to continue to dictate the local main board down the road,” Huang added.
The Fed has scheduled a policymaking meeting for Tuesday and Wednesday next week.
Elsewhere in Asia on Friday, investors remained on edge as the curtain came down on another volatile week for markets, with fears of a global trade war playing off against a positive economic outlook.
Dealers have swung from optimism to pessimism since last week’s controversial move by US President Donald Trump to levy tariffs on imports of some metals, with the removal of his moderate secretary of state adding to the unease.
However, Trump’s agreement to meet North Korean leader Kim Jong-un to discuss Pyongyang’s nuclear weapon program provided much-needed relief, while a positive US jobs and wages report tempered worries interest rates would shoot up.
Attention has turned to the Fed’s monetary policy meeting.
A rate rise is expected, but its statement and new Fed Chairman Jerome Powell’s comments will be pored over for clues about future hikes with speculation it could announce three more this year.
“It’s shaping up to be arguably one of the most critical central bank policy events in some time, as Jay Powell gets set to dictate the course of Fed policy for the remainder of 2018 and beyond,” Oanda Corp head of Asia-Pacific trade Stephen Innes said.
“Given the enormity of the risk event, traders are getting remarkably anxious awaiting hints on forward guidance, so we should expect interest rate uncertainty to intensify as we near the event horizon,” he said.
Wall Street’s three main indices ended mixed, with a drop in US jobless claims providing support, while White House National Trade Council Director Peter Navarro, a trade hawk looking to sooth trade war fears, told CNBC the Trump administration planned to work with allies “to make things better for everybody.”
However, he added that Trump would soon consider fresh measures against Beijing over its “theft” of US intellectual property.
Tokyo’s Nikkei 225 on Friday ended down 127.44 points, or 0.6 percent, at 21,676.51, rising 1 percent from 21,469.20 a week earlier.
Hong Kong’s Hang Seng on Friday slipped 39.13 points, or 0.1 percent, to 31,501.97, an increase of 1.6 percent from 30,996.21 on March 9.
The Shanghai Composite on Friday fell 21.23 points, or 0.7 percent, to 3,269.88, shedding 1.1 percent from a close of 3,307.17 a week earlier.
Seoul’s KOSPI on Friday edged up 1.59 points, or 0.1 percent, to close at 2,493.97, rising 1.4 percent from 2,459.45 a week earlier.
Sydney added 0.4 percent, but Singapore eased 0.1 percent, while Bangkok and Jakarta were also down.
Further uncertainty has been fanned by reports that Trump is planning to dismiss US National Security Adviser H.R. McMaster, just days after US Secretary of State Rex Tillerson was ousted and not long since Trump’s chief economic adviser, Gary Cohn, resigned.
The upheaval has led to concerns about instability in the White House and a shift to a more hardline approach to world affairs.
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