Taiwan shares rebound but turnover remains thin


CNA

TAIPEI — Taiwan share prices staged a mild technical rebound yesterday from heavy losses seen in the previous session, but turnover remained at a low level, indicating many investors preferred to stay on the sidelines amid the global financial turmoil, dealers said.

Sentiment was cautious, although Wall Street recovered overnight, snapping a three-day losing streak after the latest data on jobless benefit claims in the U.S. was better than expected, they said.

In such a quiet session, large cap stocks lacked momentum to lead the broader market to go even higher, they added.

“Despite the rebound, many investors were still reluctant to chase prices at the moment amid uncertainty over a market outlook,” Mirae Asset Management analyst Arch Shih said.

“It is not easy for the local bourse to leave behind the concerns that the European debt problems will further hurt the world’s economic fundamentals,” Shih said. “Pessimism toward the global economy for next year is growing.”

The weighted index closed up 20.50 points or 0.30 percent at 6,785.09, after moving between 6,757.33 and 6,810.08, on turnover of NT$52.83 billion.

The market opened up 0.34 percent as investors took cues from Wall Street’s gains, but with the index breaching 6,800 points, pressure emerged to cap the upside until the end of the session, dealers said.

“With no immediate solution to deal with the debt crisis in Europe, I expect more and more investors will retreat from the trading floor,” Shih said.

“Moreover, political uncertainty ahead of the Jan. 14 presidential election is expected to keep the trading volume at lows,” he said.

Shih said after Thursday’s sell- off to push the index below 6,800 points, technical resistance around that level has turned strong, adding without expansion in turnover, it would not be easy for the bourse to overcome the technical difficulties any time soon.

The cement sector scored the highest gains among the eight largest sectors on the market, finishing up 0.76 percent. Machinery and electronics rose 0.46 percent, and financials gained 0.23 percent.

However, the paper and pulp sector fell 1.05 percent, textiles shed 0.81 percent, foodstuffs lost 0.71 percent, construction stocks dropped 0.44 percent, and plastics and chemicals closed down 0.20 percent.

Among the large high-tech stocks, Taiwan Semiconductor Manufacturing Co. rose 0.28 percent to end at NT$72.70, while smartphone maker HTC fell 0.45 percent to close at 439.50.