The TAIEX yesterday closed moderately higher on strong gains posted overnight by US markets, but the upturn was limited by uncertainty from the arrival of the earnings season, dealers said.
The bellwether electronics sector continued to push the market higher, led mainly by iPhone assembler Hon Hai Precision Industry Co (鴻海) and other large-cap tech stocks, dealers said.
The financial sector also supported the gains, staging a rebound from weakness seen a session earlier, they added.
The TAIEX ended up 47.67 points at 10,690.3, or 0.45 percent, after moving between 10,685.1 and 10,728.38. Turnover was NT$133.367 billion (US$4.32 billion).
The market opened up 0.5 percent on overnight gains of 1.27 percent on the Dow Jones Industrial Average and 1.29 percent on the NASDAQ, which rallied on improving manufacturing activity in the US and China, dealers said.
With the TAIEX trading above 10,700 points in the first 40 minutes of the session, some investors started selling, causing the market to close below the threshold, they said.
“Today’s gains were initially boosted by yesterday’s aggressive buying by foreign institutional investors, as well as the upturn in US markets,” Mega International Investment Services Corp (兆豐投信) analyst Alex Huang (黃國偉) said.
On Monday, foreign institutional investors bought a net NT$9.13 billion in shares before buying an additional net NT$8.04 billion yesterday, the TWSE said.
“The room for a further upturn was limited, as investors have directed their attention to the upcoming earnings season for the first quarter in Taiwan and the US,” Huang said. “Many investors appeared reluctant to chase prices for the time being amid fears over possible negative leads from earnings and sales guidances given by major companies.”
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, is to hold an investors’ conference on April 18.
Investors are likely to focus on TSMC’s projection for sales growth in the second quarter and the full year, Huang said.
“So the TAIEX closed moderately higher today after giving up part of its earlier gains,” he said. “It’s no surprise that there was little room for further gains.”
The silver lining was that Hon Hai shares continued to rise because of strong fourth-quarter earnings that it reported on Friday last week, Huang said.
Shares of Hon Hai gained 1.49 percent to close at NT$82, with 99.67 million shares changing hands, after rising by the maximum daily increase of 10 percent on Monday.
Hon Hai’s market cap remained the second-highest on the market behind only TSMC at NT$1.137 trillion, up from NT$1.12 trillion a day earlier.
Shares of TSMC, which underperformed the broader market, closed 0.2 percent higher at NT$246, off a high of NT$249.5, to end the day with a market cap of NT$6.379 trillion.
Also in the electronics sector, shares of Largan Precision Co (大立光), a supplier of camera lenses to Apple Inc, staged a technical rebound from a 3.61 percent decline on Monday, rising 3.24 percent to close at NT$4,625.
Shares of integrated circuit designer MediaTek Inc (聯發科) added 1.75 percent to end at NT$290.5.
In the financial sector, which also bounced back from a session earlier and gained 0.25 percent, shares of Fubon Financial Holding Co (富邦金控) closed 0.88 percent higher at NT$46, while those of Cathay Financial Holding Co (國泰金控) rose 0.67 percent to end at NT$44.8.
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