Shares staged a technical rebound yesterday as bargain hunters picked up shares of companies in the Apple Inc supply chain, which had been hammered recently on lingering concerns over shipments of the latest iPhone models, dealers said.
The rebound reflected dwindling concerns over weakness of the yuan, which has shown some signs of stabilizing in recent days, encouraging investors to buy into the old-economy sector, they said.
However, turnover was still thin as investors remained cautious ahead of Saturday’s presidential and legislative elections, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 56.16 points, or 0.72 percent, at 7,824.61, after moving between 7,786.33 and 7,865.98, on turnover of NT$74.274 billion (US$2.21 billion).
The market opened 0.4 percent higher in the wake of gains posted on Wall Street, where the Dow Jones Industrial Average rose 0.72 percent and the S&P 500 added 0.78 percent overnight, dealers said.
Buying focused on the high-tech sector and spread to the old-economy sector to push the index to the day’s high before some selling emerged to cap the upturn before the end of the session, they said.
“A stabilizing yuan was a relief to many investors in the region. In Taiwan, bargain hunters were more willing to jump into the market,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
“The electronics sector simply benefited from today’s [yesterday’s] bargain hunting. In particular, Apple concept stocks bounced back from a recent slowdown, led by heavyweights such as Largan Precision Co (大立光),” Huang said.
The electronics sub-index closed up 0.73 percent, while the optoelectronics sub-index, anchored by Largan, closed up 3.16 percent.
Largan, a smartphone camera supplier to Apple and the most expensive stock in Taiwan, rose 6.79 percent to close at NT$1,965 after a 4.91 percent plunge a session earlier.
Among other suppliers to Apple, Hon Hai Precision Industry Co (鴻海精密), an assembler of iPhones and iPads, rose 0.39 percent to close at NT$76.6 and Pegatron Corp (和碩), an assembler of the iPhone 6S, added 1.05 percent to end at NT$67.3.
“Apple is reportedly planning to launch a 4-inch iPhone, called the iPhone 5e, in a bid to reverse slowing demand for the latest iPhone 6S and iPhone 6S Plus. The news led investors to buy these local suppliers today,” Huang said.
According to the reports, the “e” stands for “enhanced,” indicating that the upcoming iPhone 5e model is to be an enhanced edition of the iPhone 5S.
In the old-economy sector, Formosa Plastics Corp (台塑) rose 2.74 percent to close at NT$74.9, while food maker Uni-President Enterprises Corp (統一) gained 2.55 percent to end at NT$52.3.
“Despite the gains, the strength of the rebound does not appear significant,” Huang said.
“Many investors remained reluctant to chase prices before Saturday’s elections, resulting in low trading volume,” he said.
The low turnover would likely continue on the final two trading sessions today and tomorrow before Saturday’s polls, Huang added.
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