Sun, Dec 08, 2019 - Page 14 News List

TAIEX rises amid thin turnover

CONSOLIDATION:One analyst said that with foreign institutional investors stepping away for the holidays as the index nears technical resistance, a breakthrough is unlikely

Staff writer, with CNA and AFP

Local shares on Friday ended slightly higher as investors locked in earlier gains, which eroded an upturn on the main board by the end of the trading session ahead of the nearest technical resistance level, with the index breaching 11,600 points, dealers said.

Market sentiment continued to be dictated by uncertainty over global trade as the US and China have yet to sign a “phase one” agreement to resolve their trade disputes, while turnover remained thin, as many foreign institutional investors were away from the trading floor for year-end holidays, they said.

The TAIEX on Friday ended up 14.99 points, or 0.13 percent, at 11,609.64, rising 1 percent from a close of 11,489.57 on Nov. 29, after moving between 11,577.83 and 11,657.65, with turnover totaling NT$109.61 billion (US$3.59 billion).

The market opened up 0.39 percent and soon rose to the day’s high on follow-through buying from a session earlier, when the TAIEX closed up 0.73 percent, but with the weighted index breaching 11,600 points and moving closer to the technical hurdles at about 11,668 points, an intraday high recorded on Nov. 6, selling emerged to force the main board to give up its earlier gains, the dealers said.

Profit-taking focused on large-cap stocks in the bellwether electronics sector, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), while some investors shifted their attention to select old economy stocks, which played catch-up with their tech counterparts, they said.

“Technically speaking, the local main board has fallen into consolidation mode, in particular ahead of 11,668 points,” equity market analyst Andy Hsu (許博傑) said. “So, even though the TAIEX opened higher today, the willingness to chase prices appeared weak.”

“With many foreign institutional investors having stepped away from the local market for the holiday period, turnover continued to fall, making it unlikely that the TAIEX will make a breakthrough anytime soon,” Hsu said.

Friday’s turnover was less than the average of NT$111.4 billion in the previous five trading sessions, Hsu said, adding that trading volume could shrink further as the holidays approach.

“Therefore, as tech heavyweights in the bellwether electronics sector, including TSMC, saw their gains eroded, the broader market simply followed suit,” Hsu said.

TSMC, the most heavily weighted stock on the local market, rose 0.32 percent to close at NT$313 after coming off a high of NT$316, with 17.66 million shares changing hands. In line with TSMC’s fluctuations, the electronics sector ended up 0.13 percent to end at 504.37, off a high of 509.95.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co (鴻海精密), second behind TSMC in terms of market capitalization, rose 0.67 percent to close at NT$90.50, off a high of NT$90.90.

While its sales for last month hit a monthly record high, Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, fell 0.42 percent to end at NT$4,690 after hitting a high of NT$4,755.00.

Outperforming the broader market, stocks of passive electronic components, such as multilayer ceramic capacitors and resistors, attracted buying on tight supply, with Yageo Corp (國巨) up 1.93 percent to close at NT$369 and rival Walsin Technology Corp (華新科) up 2.84 percent to end at NT$181.

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