Local shares yesterday closed slightly higher, despite reduced trading volume as many foreign institutional investors were away from the trading floor on the weekend, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and some large-cap stocks in the non-high-tech sector maintained their momentum from the previous session, offsetting losses suffered by Hon Hai Precision Industry Co (鴻海精密) on last year’s disappointing earnings, dealers said.
Taiwan was the only equity market open yesterday, which was a regular workday to make up for a session to be lost during the Tomb Sweeping Day holiday next week.
The TAIEX yesterday ended up 13.27 points, or 0.12 percent, at 10,919.49, after moving between 10,905.69 and 10,947.16, on turnover of NT$75.57 billion (US$2.6 billion). That was an increase of 0.9 percent from a close of 10,823.33 on March 23.
The market opened up 0.18 percent on follow-through buying from the previous session, but soon fell into consolidation mode, as buying in TSMC, the most heavily weighted stock on the Taiwan Stock Exchange, helped offset the impact of the selling in Hon Hai, dealers said.
“It was no surprise that the local main board moved in a quiet session today, given the lack of indications from Wall Street, which was closed on Good Friday,” KGI Securities Co (凱基證券) analyst Phil Chu (朱有志) said. “With many foreign institutional investors away from the trading floor, turnover was reduced and there was little fluctuation in share prices.”
TSMC, the world’s largest contract chipmaker, maintained its momentum from the previous session, which helped the broader market remain above the previous close throughout the session, Chu said.
TSMC gained 0.61 percent to close at NT$247.50, with 3.59 million shares changing hands.
Meanwhile, Hon Hai, the main assembler of Apple Inc’s iPhones, fell 3.17 percent to close at NT$88.50 on trading volume of 136.29 million.
The losses resulted from last year’s earnings report the previous day, which showed a 6.68 percent annual decline in net profit to NT$138.73 billion and earnings per share of NT$8.01, compared with NT$8.60 in 2016.
The selling in Hon Hai most likely came primarily from foreign institutional investors who were disappointed with the weaker-than-expected demand for the iPhone X, which Hon Hai assembles, Chu said.
Foreign institutional investors yesterday sold a net NT$64.56 million of shares on the main board, Taiwan Stock Exchange data showed.
Select old economy and financial stocks also lent support to the broader market, Chu said.
Among the gaining old economy stocks, Formosa Plastics Corp (台灣塑膠) rose 0.48 percent to close at NT$104, while food and beverage conglomerate Uni-President Enterprises Corp (統一企業) gained 0.73 percent to end at NT$69.
In the financial sector, which closed up 0.21 percent, Cathay Financial Holding Co (國泰金控) added 1.16 percent to end at NT$52.50 and E.Sun Financial Holding Co (玉山金控) gained 0.25 percent to close at NT$19.55.
“Judging from the gains posted by non-high-tech stocks, I think the buying came from retail and institutional local investors, as many foreign institutional investors were absent,” Chu said.
The local main board could see some technical support at about 10,800 points in the short term if there is a technical correction, he added.
On Friday, Japanese stocks led the way in Asia, climbing higher following a rally on Wall Street, but the majority of Asian markets were closed for a four-day Easter holiday weekend.
Easing tensions on the Korean Peninsula, with the two Koreas setting a date for a rare inter-Korean summit this month, also buoyed investor sentiment.
Among the few markets trading in Asia, Tokyo’s Nikkei 225 on Friday rose 295.22 points, or 1.4 percent, to 21,454.30, jumping 4.1 percent from 20,617.86 on March 23.
Seoul’s KOSPI on Friday rose 9.48 points, or 0.4 percent, to 2,445.85, an increase of 1.2 percent from a close of 2,416.76 a week earlier.
Shanghai on Friday added 8.37 points, or 0.3 percent, at 3,168.90, edging up 0.5 percent from 3,152.76 on March 23.
The financial markets in Australia, India, Indonesia, the Philippines, Singapore, New Zealand and Hong Kong were on Friday closed for public holidays.
“Further easing of tension over North Korea has ... contributed to improving investor sentiment,” said Toshihiko Matsuno at the investor information division of SMBC Nikko Securities Inc.
Japanese stocks also followed the lead from Wall Street, where a rally in technology shares drove the Dow Jones Industrial Average to close up 1.1 percent ahead of the long Easter holiday weekend.
“The onset of the Easter holiday encouraged investors to take a well-deserved breather,” London Capital Group head of research Jasper Lawler said.
Looking further ahead, analysts in Japan said they would be closely monitoring the tankan quarterly business confidence survey tomorrow.
“We want to check the impact of the recent strong yen on corporate sentiment,” Chibagin Asset Management Co Ltd general manager Yoshihiro Okumura said, adding that investors would also be looking at US payroll figures on Friday.
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