TAIPEI — The local bourse moved higher and ended above the crucial 8,000 point level yesterday as many investors turned upbeat that Greece will strike a deal with its private bondholders on debt restructuring to avoid a default, dealers said.
While buying in select high-tech stocks, such as flat panel makers and personal computer suppliers, helped the broader market to jump over the technical hurdles ahead of 8,000 points, interest in the financial sector retreated to compromise the upside, they said. The weighted index closed up 31.45 points or 0.39 percent at 8,016.01, after moving between 7,965.68 and 8,027.08, on turnover of NT$104.90 billion. The market opened up 0.19 percent as buying was ignited by Wall Street’s gains overnight on improving sentiment toward the debt situation in the eurozone and momentum increased to push the index higher, dealers said. However, the gains were capped at the end of the session as many investors remained reluctant to chase prices before Washington released jobless data for February later in the day, they said.
“It seemed that sentiment in the global financial markets has improved a lot as many investors believed Greece is closer to reaching a debt swap agreement with its bondholders after intensive negotiations,” Hua Nan Securities analyst Stan Chang said, referring to the rallies in the bourses in Tokyo, Seoul and Hong Kong.
Once Greece and its debtors make a deal, the hurdles will be cleared for the debt-ridden country to get a new round of bailout funds. “That’s why investors braved the strong technical resistance today, picking up some high-tech stocks, like flat panel makers, which posted an increase in sales for February,” Chang said. Among the winning electronics stocks, flat screen supplier AU Optronics (AUO) rose 3.56 percent to close at NT$16.00 after its reported an almost 30 percent increase in its revenue last month. Led by AUO, rival Chimei Innolux gained 2.90 percent to end at NT$15.95. In the PC sector, Acer closed up 2.12 percent at NT$43.30 and Wistron ended up 1.18 percent at NT$47.20. Chang said although the index breached 8,000 points, the market is expected to face further technical pressure so that the index is likely to move in a narrow range over the next few sessions. “Investors had better keep a close eye on the U.S. jobless data for February for a clearer picture about the world’s economic fundamentals before making their next move in the equity market,” Chang said. At the end of the session, the machinery and electronics sector scored the highest gains among the eight largest sectors of the market, finishing up 0.8 percent. Plastics and chemicals rose 0.3 percent, and paper and pulp stocks added 0.2 percent, while foodstuffs closed unchanged. Bucking the gains posted by the broader market, financial, construction and textile stocks fell 0.3 percent, and the cement sector closed down 0.1 percent.