The TAIEX yesterday closed higher, but the gains were limited by strong technical resistance after the main board surpassed 16,500 points at one point amid fears over growing inflationary pressure in the US.
The US Department of Labor overnight reported that the nation’s consumer price index (CPI) for last month grew 5.4 percent year-on-year and 0.4 percent month-on-month.
“It appeared there were high technical hurdles ahead of 16,500 points,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “It was no surprise that the willingness to chase prices was low.”
“Many investors simply seized on the latest CPI growth in the US as an excuse to lock in their earlier gains amid growing fears that the US Federal Reserve will move at a faster pace to take back funds from the market,” Su said.
The TAIEX closed up 39.29 points, or 0.24 percent, at 16,387.28. Turnover totaled NT$256.352 billion (US$9.12 billion), with foreign institutional investors buying a net NT$3.43 billion of shares on the main board.
“The tech sector gave up part of its earlier gains as large-cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came off its earlier high,” Su said.
TSMC rose 0.35 percent to close at NT$573 after hitting a high of NT$579.
“While the market anticipated TSMC would give positive leads at its investors’ conference today, many investors remained reluctant to raise their holdings in the stock out of an abundance of caution,” he said.
While many Apple Inc suppliers came under pressure on reports that the US tech giant could cut its iPhone shipments for this year due to a global chip shortage, shares of iPhone assembler Hon Hai Precision Industry Co (鴻海精密), which is second to TSMC in terms of market capitalization, rose 0.95 percent to close at NT$106.5.
“Hon Hai benefited from its efforts at developing electric vehicles,” Su said.
The transportation sector, where many major shipping stocks are traded, staged a technical rebound, rising 2.73 percent, while other old-economy stocks were mixed, as investors fear a spike in inflationary pressure would hurt the global recovery and cut demand, he said.
“With worries over inflation on the rise, investors should continue to keep a close eye on how the US benchmark 10-year Treasury yield moves,” Su said. “In addition, the ongoing earnings season at home and in the US also deserves further attention.”
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