Taipei shares on Friday closed higher after recouping earlier losses caused by rising geopolitical concerns over North Korea’s latest missile launch earlier in the day, dealers said.
Buying focused on select large-cap stocks in both the high-tech and old economy sectors, helping the broader market rebound from the early downturn by the end of the session, they said.
Market sentiment remained cautious because of heightened expectations of a rate hike by the US Federal Reserve after inflation in the US last month exceeded market estimates, dealers said.
The TAIEX closed up 26.84 points, or 0.25 percent, at 10,580.41 after moving between 10,520.15 and 10,580.78 on turnover of NT$155.14 billion (US$5.16 billion). That compared with a close of 10,609.95 on Sept. 8, a 0.3 percent decrease for the week.
The market opened up 3.25 points and continued to move higher early in the day on follow-through buying from a day earlier, but downward pressure set in as investors reacted to market tumbles in Tokyo and Seoul after Pyongyang’s missile launch, the dealers said.
Local share prices were below the previous day’s closing level for most of the session before big players turned active late.
They picked up market heavyweights, such as smartphone lens maker Largan Precision Co (大立光) and contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to push the broader market into positive territory in the final few minutes of trading.
“I suspect that the last-ditch buying came from government-led funds since noneconomic factors, such as geopolitical tensions, served as a good reason for the government to lend support to the market,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said.
The late-session buying targeted large-cap stocks and pushed Friday’s turnover up to more than NT$150 billion, from about NT$124 billion a session earlier, Su said, adding that about NT$34 billion in shares were traded in the session’s final minutes.
Among the stocks that benefited from the surge, Largan, a smartphone camera lens supplier to Apple Inc, gained 1.24 percent to close at NT$5,720, off an early low of NT$5,530 amid hopes that the launch of Apple’s new iPhones will boost its shipments for the rest of this year and even in the first quarter of next year.
Also in the Apple supply chain, iPhone and iPad assembler Hon Hai Precision Industry Co (鴻海精密), rose 0.44 percent to close at NT$115, off an early low of NT$114.
TSMC, the most heavily weighted stock on the local market, ended unchanged at NT$218.50 after hitting an early low of NT$217.
In the old economy sector, Formosa Plastics Corp (台塑) and Nan Ya Plastics Corp (南亞塑膠) also got a boost from the late-session interest, rising 0.85 percent and 0.26 percent respectively to end at NT$95.40 and NT$75.70.
“Despite the gains, the main board still faces stiff technical resistance at about 10,600 points,” Su said. “Without the bellwether electronics sector making a significant leap, it will not be easy to push well above that level.”
“In particular, many investors have renewed concerns over a rate hike by the Fed after the latest inflation numbers in the US market. I think the local market will continue to consolidate,” Su said.
The US consumer price index last month rose 1.9 percent from a year earlier, higher than the 1.8 percent rise generally expected by the market.
Seoul, Tokyo and Hong Kong stocks on Friday ended higher as traders brushed off initial concerns over North Korea’s missile launch, while most other Asian markets pared their losses.
News of the launch rattled the regional markets, which had started to enjoy a return to optimism after last week’s global sell-off sparked by a nuclear test that fanned fears of a regional conflict.
However, by the end of the day the losses had either been sharply cut back or reversed.
The KOSPI bounced back to end 0.4 percent higher at 2,386.07, a 1.8 percent increase from a week earlier, while the South Korean won also made a U-turn to sit 0.1 percent up.
Tokyo maintained its gains through the day, rising 0.5 percent to close at 19,909.50 as the yen weakened against the US dollar on a strong US inflation report. The Nikkei 225 rose 3.29 percent from a close of 19,274.82 on Sept. 8.
Hong Kong rose 0.1 percent to close at 27,807.59, rising 0.5 percent from 27,668.47 a week earlier, but Shanghai shed 0.5 percent to end at 3,353.62, falling 0.3 percent from 3,365.24 on Sept. 8.
Singapore lost 0.2 percent and Sydney was 0.8 percent off, while Wellington and Manila also closed lower.
“I wouldn’t necessarily say this is an escalation,” Melbourne-based K2 Asset Management Ltd portfolio manager James Soutter told Bloomberg News. “This is more of a continuance of provocation. Hence markets won’t like it, but I don’t think it’s necessarily the precursor to a sustained market pullback.”
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