TAIPEI — Shares in Taiwan moved higher yesterday after Wall Street reached a new record high overnight, but the upside was limited as the index moved closer to the nearest technical resistance level at around 8,000 points, dealers said.
Buying rotated to the financial sector as investors embraced high hopes that this area will benefit from increasing financial exchanges across the Taiwan Strait, while a sluggish electronics sector kept the broader market from rising further, the dealers said.
The weighted index closed up 10.21 points, or 0.12 percent, at 7,960.51, after moving between 7,942.37 and 7,984.29, on turnover of NT$82.03 billion.
The market opened up 0.6 points and momentum accelerated as investors took cues from Wall Street, which was boosted overnight by the latest report from the United States Federal Reserve that described economic activity in the U.S. as expanding at a “modest to moderate pace.”
However, turnover in the local bourse was moderate, keeping the fluctuations within a narrow range as many investors stayed on the sidelines amid fears that the market would suffer a major pullback as it approached the 8,000 point mark, the dealers said.
“Technical hurdles remained high, preventing share prices from going higher at the end of the session,” Concord Securities analyst Kerry Huang said.
“Unless trading volume expands to NT$100 billion or higher, the market is likely to continue to move in ranged trade in a bid to gradually digest downward pressure,” Huang said.
The financial sector ended up 1.52 percent, serving as a driver to the latest gains on the broader market on expectations that Taiwan and China will further relax their restrictions governing financial exchanges, Huang said.
“In addition to the high hopes about the sector’s business expansion in China, many financial stocks appeared attractive in terms of their relatively low valuations. Bargain hunters chased large-cap stocks throughout the session today,” Huang added.
Among the winning financial stocks, Cathay Financial Holding Co. gained 5.0 percent to close at NT$40.95, while rival Chinatrust Financial Holding Co. added 3.13 percent to end at NT$18.10.
“However, the electronics sector remained in the doldrums after several heavyweights reported disappointing February sales data as a result of the slow season effect in the first quarter of the year,” Huang said.
Smartphone camera lens supplier Largan Precision Co. fell 1.04 percent to close at NT$764.00. The electronics sub-index closed down 0.19 percent.
“Without the high-tech sector scoring significant gains in line with the financial sector, it will be difficult for the market to take off any time soon,” Huang said.