Taiwan shares close up by 0.82 percent despite China move


CNA

TAIPEI — Taiwan share prices closed up 0.82 percent yesterday as buying in large cap electronic stocks resumed amid ample liquidity, with investors ignoring China’s second increase in reserve requirements in a matter of days, dealers said.

The weighted index rose 68.79 points to 8,374.91, after moving between 8,334.42 and 8,391.25, on turnover of NT$88.87 billion (US$2.93 billion).

The market opened up 0.45 percent as investors shrugged off China’s latest monetary tightening measures, and the momentum accelerated with bargain hunters emerging to pick up bellwether high-tech firms on low valuations, dealers said.

Construction stocks also attracted buying on hopes that local property prices will get a boost after the local media reported the government is mulling a NT$18.46 billion urban renewal plan, they said.

A total of 2,115 stocks closed up, 1,573 finished down, and 418 remained unchanged.

The construction sector scored the highest gains, up 2.0 percent. Along with textile firms, machinery and electronic stocks rose 1.1 percent, and financial shares added 0.5 percent. Foodstuff and cement shares both closed 0.3 percent higher.

Plastics and chemical shares closed unchanged, while paper and pulp shares fell 0.2 percent.

“It seemed that investors were relieved to some extent by China only raising bank reserve requirements rather than increasing interest rates to curb inflation,” Mega Securities analyst Alex Huang said.

Huang said worries over further interest rate hikes in China affected markets in the greater China area at the end of last week, but it turned out that China’s central bank adopted less stringent tightening measures.

“With market sentiment improving, bargain hunting turned active and targeted the high-tech sector, which has been under consolidation for some time,” Huang said.

Huang cautioned, however, that as technical resistance remained at around 8,400 points, it was unlikely for the market to jump beyond that hurdle until political uncertainty over Taiwan’s Nov. 27 municipality elections was removed.

Among large cap electronic stocks, smartphone maker HTC rose 5.93 percent to NT$876.00 and IC packaging and testing firm Advanced Semiconductor Engineering gained 4.16 percent to NT$28.80.

In the construction sector, Kuo Yang Construction rose 4.35 percent to NT$25.20 and Prince Housing added 4.26 percent to NT$25.70.