The TAIEX closed slightly lower yesterday as buying rotated to old-economy and financial stocks to offset losses in the electronics sector that emerged after technology stocks plunged on US markets.
Turnover remained thin, with many investors staying on the sidelines amid fears over negative leads that might emerge during the Lunar New Year holiday, dealers said.
The local market is closed from today to Feb. 6.
Photo: CNA
The TAIEX closed down 26.72 points, or 0.15 percent, at 17,674.40. Turnover totaled NT$224.109 billion (US$8.08 billion), with foreign institutional investors selling a net NT$15.11 billion of shares on the main board, Taiwan Stock Exchange data showed.
“After recent heavy losses, it seemed the local market attempted a technical rebound with old-economy and financial stocks riding the waves of rotational buying, which assuaged the impact from tech losses caused by rate-hike fears,” Hua Nan Securities Co (華南永昌證券) analyst Lu Chin-wei said.
“While foreign institutional investors continued to stand on the sell side to unload tech stocks — as the tech sector has lost its luster due to rate hike concerns — local institutional investors rushed to pick up old-economy stocks, in particular shipping stocks,” Lu said.
The transportation sector, where major shipping and airline stocks are traded, rose 2.21 percent.
“Shipping stocks, such as Evergreen Marine Corp (長榮海運), weigh a lot in the TAIEX and with their high prices, their gains did lend support to the broader market,” Lu said.
Evergreen Marine is the 12th-largest company by market capitalization on the main board, Taiwan Stock Exchange data showed.
The firm’s shares bounced back by 2.73 percent to close at NT$113.
Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) gained 3.68 percent and 1.37 percent to close at NT$98.6 and NT$147.5 respectively.
China Airlines Ltd (中華航空) rose 2.63 percent to close at NT$23.4 and EVA Airways Corp (長榮航空) gained 1.91 percent to close at NT$24.
In addition to the old-economy sector, rotational buying also focused on the financial sector, Lu said, adding: “I suspect government-led funds simply bought into financial heavyweights in a bid to prevent the TAIEX from falling further on the last trading session of the Year of the Ox.”
The financial sector rose 0.36 percent, with CTBC Financial Holding Co (中信金控) up 1.28 percent to close at NT$27.6 and Shin Kong Financial Holding Co (新光金控) up 0.91 percent to close at NT$11.05.
Fubon Financial Holding Co (富邦金控) added 0.13 percent to close at NT$75.6 and Cathay Financial Holding Co (國泰金控) gained 0.48 percent to close at NT$63.3.
The electronics sector remained haunted by the rate-hike concerns.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) fell 0.78 percent to close at NT$636 after a fall of 1.76 percent on Tuesday.
Led by TSMC, the electronics sector lost 0.62 percent, with the semiconductor subindex down 0.84 percent.
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