The TAIEX closed little changed yesterday after bargain hunting in the latter part of the session helped the broader market recoup its earlier losses, dealers said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest contract chipmaker, came under heavy pressure after the company scaled back its capital expenditure for this year, the dealers said.
The selling spread to rival United Microelectronics Corp (UMC, 聯電).
However, other IC stocks and high-tech firms in Apple Inc’s supply chain, in particular Hon Hai Precision Industry Co (鴻海), as well as financial stocks, appeared resilient, which lent support to the market, the dealers said.
The TAIEX closed up 3.43 points, or 0.03 percent, at 8,604.95, after moving between 8,574.64 and 8,627.93, on turnover of NT$94.04 billion (US$2.9 billion).
It was the second consecutive session in which the index closed higher than 8,600 points.
The market opened up 8.56 points and moved to the day’s high on follow-through buying from a 0.92 percent increase seen the previous session, the dealers said.
While TSMC and UMC faced selling, other high-tech and financial stocks posted gains, which helped the index move above the previous close, they said.
However, with the index moving closer to 8,700 points, some investors shifted to the sell side, pushing the broader market into the red before bargain hunters turned active in the latter part of the session to vault the index back into positive territory at the close, the dealers said.
“Foreign institutional investors still built up a net of more than 20,000 long-position contracts in the futures market. I think that foreign investors wanted a higher spot market to profit in futures,” Marbo Securities Investment Consulting analyst Chang Chih-cheng (張智誠) said.
“That’s why the market witnessed the index recovering its earlier losses to close above 8,600 points again today,” Chang said.
Investors paid close attention to the movement of TSMC shares after the firm cut its capital expenditure for this year to US$8 billion from the previously planned between US$10.5 billion and US$11 billion at an investors’ conference a day earlier, citing weakening global demand.
TSMC, the most heavily weighted stock in the local market, fell 1.79 percent to close at NT$137.5, and selling extended to UMC, which lost 1.22 percent to close at NT$12.15.
“I think the impact on TSMC shares resulting from the capital expenditure cut will be short-lived,” Chang said. “TSMC is expected to launch the advanced 10-nanometer process next year and its sales are expected to pick up then.”
Among the rising high-tech stocks, IC packaging and testing services firms Advanced Semiconductor Engineering Inc (日月光) gained 2.53 percent to close at NT$38.5 and Siliconware Precision Industries Co (矽品) added 3.54 percent to close at NT$43.9.
In the Apple supply chain, Hon Hai, an assembler of iPhones and iPads, rose 1.27 percent to close at NT$87.8, while smartphone camera lens maker Largan Precision Co (大立光) closed unchanged at NT$2,585 off an early high of NT$2,690.
In the financial sector, which benefited from rotational buying to end up 0.80 percent, Fubon Financial Holding Co (富邦金控) rose 0.96 percent to close at NT$52.7, and CTBC Financial Holding Co (中信金控) gained 2.47 percent to close at NT$18.65.
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