TAIPEI — Share prices in Taiwan staged a technical rebound yesterday, led by high-tech heavyweights that had been hammered in recent sessions on concerns over weakening global demand, dealers said.
Among the large-cap electronics stocks, HTC, the fourth largest smartphone vendor in the world, rallied after it announced a share buyback plan, helping draw interest to other companies in the high-tech sector, they said.
Turnover remained anemic, however, as market sentiment was still overshadowed by negative external factors, and many investors were reluctant to chase prices and push the index higher, they added.
The weighted index closed up 29.31 points, or 0.44 percent, at 6,662.64, after moving between 6,646.30 and 6,696.93, on turnover of NT$60.36 billion. The market opened up 0.48 percent and moved to the day’s high in the first quarter hour of the session based on recoveries in other markets in the region, as fears receded that the death of North Korean leader Kim Jong Il would trigger instability on the Korean Peninsula.
As the benchmark TAIEX moved toward the 6,700 mark, however, profit taking emerged to cap the gains, with investors still concerned that the European financial crisis would continue to erode the world’s economic fundamentals, they said.
“It was just a mild technical rebound from yesterday’s steep decline,” Mirae Asset Management analyst Arch Shih said. “Without expansion in turnover, it will be hard for the market to make any significant advances any time soon.” Shih said that after the market fell below the crucial 6,700 mark Monday, there was heavy technical resistance preventing it from moving back over that level.
“The silver lining was that large-cap stocks, like HTC, which still have healthy fundamentals, started to make a comeback today after a recent heavy sell-off,” Shih said.
“If these market heavyweights continue to move higher, it is possible for more investors to return to the trading floor to buy,” he said.
HTC rose 7 percent, the maximum daily increase allowed on Taiwan’s market, to close at NT$476.00 on the back of a share repurchase plan.
The market was also buoyed by a United States International Trade Commission’s (ITC’s) ruling in a patent infringement dispute that was more favorable to HTC than had been expected.
In a preliminary ruling handed down in July, the ITC said HTC infringed two of Apple’s patents, but in its final ruling on Monday, an ITC panel found that HTC had only partially violated one of the Apple patents.
Among other large-cap electronics, cellphone camera lens-maker Largan Precision rose the maximum 7 percent to close at NT$522.00 and touch panel supplier TPK Holding added 3.31 percent to close at NT$343.00.
The food sector scored the biggest gains among the largest eight sectors of the market, finishing up 1.8 percent. Machinery and electronics shares added 0.9 percent, textile stocks gained 0.4 percent, cement shares rose 0.3 percent, and paper and pulp issues closed up 0.1 percent.
Financial shares and plastics and chemical stocks both fell 0.8 percent, and construction stocks fell 0.1 percent.