Taiwanese shares trended lower yesterday as investors locked in gains from previous sessions, but the weighted index still closed above the 8,100-point mark amid ample liquidity, dealers said.
Foreign institutional investors stayed on the buy side, lending support to large-cap stocks, they said.
The TAIEX closed down 25.72 points, or 0.32 percent, at 8,131.24, after moving between 8,091.14 and 8,156.25, on a turnover of NT$72.99 billion (US$2.17 billion).
The stock market opened down 0.19 percent as investors pocketed gains recorded in recent days following Wall Street’s mixed performance overnight, dealers said.
As selling picked up, driving the index below the 8,100-point mark, bargain hunters moved in, lifting the index to its closing level, they said.
“Foreign institutional investors still hold a large chunk of long position contracts in the local futures market, which shows they remain upbeat about the local spot equity market for the moment,” MasterLink Securities (元富證券) analyst Tom Tang (湯忠謙) said.
Foreign institutional investors hold a net 23,600 in long position contracts, he said.
Foreign investors have continued to move funds into the local equity market after the US Federal Reserve left its key interest rates unchanged last week, boosting liquidity, he said.
“That is why the weighted index was able to stay above 8,100 points today,” Tang said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$4.2 billion in shares on the main board yesterday.
Among the stocks that closed higher after early slides, Fubon Financial Holding Co (富邦金) rose 0.26 percent to close at NT$38.50, off an earlier low of NT$37.75; Formosa Plastics Corp (台塑) gained 0.39 percent to close at NT$76.50, off an earlier low of NT$75.80; and Nan Ya Plastics Corp (南亞) ended up 0.68 percent at NT$59.40, recovering from a low of NT$58.30.
Tang said that even some electronics heavyweights that trended lower, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), saw mild selling, “as the market was awash in liquidity.”
TSMC fell 1.04 percent to close at NT$142.50, off a low of NT$142, with 25.39 million shares changing hands.
Hon Hai Precision Industry Co (鴻海), an assembler of iPhones and iPads, lost 1.38 percent to close at NT$78.40.
Bucking the downturn in the broader market, chip designer MediaTek Inc (聯發科) ended the day 0.95 percent higher at NT$212, after recovering from a low of NT$193.50.
The stock faced heavy selling at the market’s opening after the company on Monday reported a 47.5 percent sequential decline in net profit in the fourth quarter, but bargain hunting kicked in when the stock fell below the NT$200 mark, pushing the stock into positive territory at the close, dealers said.
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