Local shares yesterday continued their momentum from the previous session to close higher, with local investors encouraged by gains posted by US markets at the end of last week amid hopes that the US and China are moving toward a resolution of their trade dispute, dealers said.
Buying was apparent in the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) as bargain hunters picked up the stock, which had been hammered by the company’s lower-than-expected sales guidance for the first quarter, they said.
Turnover remained moderate as the ongoing earnings season has turned some investors away from the local main board and led some investors to shift to the sell side, preventing the market from ending above 9,900 points, they said.
The TAIEX ended up 53.34 points, or 0.54 percent, at 9,889.40, on turnover of NT$91.795 billion (US$2.98 billion).
Foreign institutional investors bought a net NT$5.16 billion of shares on the main board, according to Taiwan Stock Exchange.
The market opened up 0.35 percent and rose to the day’s high on follow-through buying from the previous session, when the TAIEX closed up 0.48 percent, with buying sparked by the upturn in the US, where the Dow Jones Industrial Average closed up 1.38 percent and the tech-savvy NASDAQ Composite ended up 1.03 percent on Friday.
However, as the TAIEX breached the 9,900-point mark, selling emerged to cap any gains by the end of the session.
Shares in TSMC rose 1.14 percent to close at NT$221.00, with 29.36 million shares changing hands. Led by TSMC, the bellwether electronics sector closed up 0.58 percent and the semiconductor sub-index closed up 1.13 percent.
“It seems that investors left behind TSMC’s disappointing sales forecast for the first quarter, but the stock still faces the nearest technical resistance at about NT$233.50, the 60-day moving average,” Concord Securities Co (康和證券) analyst Kerry Huang said.
At an investors’ conference on Thursday last week, TSMC said that due to slowing global demand and inventory adjustments, its first-quarter sales could fall 22 percent from a quarter earlier, compared with an earlier market estimate of a 10 percent to 20 percent fall.
In the tech sector, United Microelectronics Corp (聯電) gained 2.63 percent to close at NT$11.7, memorychip maker Nanya Technology Corp (南亞科技) rose 1.42 percent to end at NT$57.20, and iPhone assembler Hon Hai Precision Industry Co (鴻海精密) added 0.56 percent to close at NT$71.2.
Buying was also seen among old-economy stocks, with food brand Uni-President Enterprises Corp (統一企業) up 0.97 percent to close at NT$72.8 and Formosa Chemicals & Fibre Corp (台灣化學纖維) up 1.41 percent to NT$108.
In the financial sector, which closed up 0.53 percent on a technical rebound, CTBC Financial Holding Co (中信金控) gained 1.5 percent to end at NT$20.25, Cathay Financial Holding Co (國泰金控) added 0.69 percent to close at NT$43.8 and Fubon Financial Holding Co (中信金控) added 0.34 percent to end at NT$44.3.
“Investors should pay close attention to the earnings season in Taiwan and on Wall Street for more clues about the business outlook for the first quarter,” Huang said, adding that Apple’s investor conference on Tuesday next week would be one of the most important.
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