Local shares on Friday extended momentum from a session earlier to close above 10,900 points, led by select large-cap stocks, as buying was sparked by a rally on US markets overnight, dealers said.
However, buying was capped as market sentiment remained cautious about the global economy amid the COVID-19 pandemic ahead of a jobs report from Washington due later in the day, the dealers said.
The TAIEX on Friday ended up 58.50 points, or 0.54 percent, at 10,901.42, after moving between 10,883.22 and 10,970.70, on turnover of NT$185.693 billion (US$6.21 billion).
That was a 0.8 percent slide from a close of 10,992.14 on April 30 — the last day of trading in a week shortened by the International Workers’ Day long weekend.
The market opened up 0.54 percent as investors were encouraged by gains posted by the US markets, with the Dow Jones Industrial Average on Thursday closing up 0.89 percent, and buying continued to push the TAIEX closer to the nearest technical resistance level of about 11,000 points before profit-taking set in to limit the upturn by the end of the session, the dealers said.
“The local main board still benefited from rotational buying amid ample liquidity, as certain tech heavyweights moved higher,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said.
“However, since the US is scheduled to release the April nonfarm payrolls report today [Friday], many investors appeared reluctant to chase prices for the moment,” Su said.
“Sentiment remained cautious as the market has widely estimated that the job figure will be ugly, as the world’s largest economy has been hit hard by the spread of COVID-19,” Su said.
The electronics sector, which on Friday served as an anchor that led the broader market to post gains, ended up 0.53 percent, with Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, rising 3.81 percent to end at NT$4,225 on strong rotational buying.
With strong demand due to telework and distance learning, PC stocks got a boost, Su said.
Among them, PC maker Asustek Computer Inc (華碩) rose 1.78 percent to close at NT$200.50 and contract notebook computer maker Inventec Corp (英業達) added 1.96 percent to end at NT$23.45.
However, contract chipmaker Taiwan Semiconductor Manufacturing Co (台積電), the most heavily weighted stock on the local market, underperformed the TAIEX, closing unchanged at NT$297.50 ahead of the technical resistance level of NT$300.
Non-tech stocks also posted gains, lending further support to the broader market, Su said.
Among the gaining old-economy stocks, meat supplier Great Wall Enterprise Co (大成長城企業) added 2.6 percent to close at NT$43.35 and food conglomerate Uni-President Enterprises Corp (統一企業) rose 1.14 percent to end at NT$70.90.
However, bucking the upturn, textile heavyweight Far Eastern New Century Corp (遠東新世) fell 0.37 percent to close at NT$27.25.
In the financial sector, a market laggard that closed up 0.58 percent, Mega Financial Holding Co (兆豐金控) rose 1.52 percent to close at NT$30, Cathay Financial Holding Co (國泰金控) added 1.03 percent to end at NT$39.25 and Fubon Financial Holding Co (富邦金控) grew 0.37 percent to close at NT$40.65.
“Amid concern over the economic effects of COVID-19, the TAIEX is expected to continue to move in a range of between 10,600 and 11,000 [points] in the near future,” Su said.
Despite the gains on the TAIEX, foreign institutional investors sold a net NT$4.12 billion of shares on the main board, Taiwan Stock Exchange data showed.
Elsewhere in Asia on Friday, Hong Kong stocks rose in line with gains in China, as investors cheered Beijing further opening up its financial markets to foreign investors and talks between US and Chinese trade officials.
China on Thursday finalized rules that would scrap quotas under two major inbound investment schemes, giving qualified foreign institutions unlimited access to Chinese stocks and bonds.
Hong Kong’s Hang Seng on Friday closed up 249.54 points, or 1 percent, at 24,230.17, but dropped 1.7 percent from a close of 24,643.59 on April 29.
Adding to the upbeat mood, top US and Chinese trade representatives on Friday discussed their “phase one” trade deal, with China saying that they agreed to improve the atmosphere for its implementation and the US saying that both sides expected obligations to be met.
The Shanghai Composite on Friday closed up 23.82 points, or 0.8 percent, at 2,895.34 points, rising 1.2 percent from 2,860.08 on April 30.
In Tokyo, stocks closed sharply higher as investors looked beyond grim economic news to focus on easing lockdown measures in parts of the US.
The Nikkei 225 on Friday closed up 504.32 points, or 2.6 percent, at 20,179.09, jumping 2.9 percent over the two-day trading week from a close of 19,619.35 on May 1.
Japanese markets were closed until Thursday due to the annual “Golden Week” holiday.
Daiwa Securities Group Inc put the bullish sentiment in Japan down to “hopes for restarting economic activities” as countries begin to reverse strict lockdown measures imposed due to the pandemic.
Blue-chip exporters were generally higher, with Sony Corp advancing 2.29 percent and Toyota Motor Corp closing up 1.21 percent.
Nintendo dropped 3.9 percent on profit-taking after the Japanese gaming giant said that it had notched up annual net profit of ￥258.6 billion (US$2.4 billion) in the fiscal year to March, a gain of 33 percent from a year earlier.
Fujifilm Holdings Corp rallied 3.62 percent after it said that it started selling test kits in Japan that detect the novel coronavirus in about 75 minutes — significantly faster than the four to five hours that an existing test method takes.
Japan’s household spending in March dropped 6 percent from a year earlier, as the coronavirus slammed spending on leisure activities, clothes and eating out, official data released before the opening bell showed.
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