Local market stages mild rebound, closes 0.35% up at 9,080.09


CNA

TAIPEI–Shares in Taiwan staged a mild technical rebound Wednesday after a plunge in the previous session as investors saw that Wall Street’s losses overnight were limited, dealers said.

The bellwether electronics sector led the gains, with integrated circuit designer MediaTek Inc. making a significant comeback on an optimistic outlook by a foreign brokerage on the company’s second-quarter profitability after the slow season in the first quarter, dealers said.

The relatively low valuation in the financial sector spurred bargain hunting, while petrochemical stocks continued to fall due to a steep decline in international oil prices, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 31.75 points, or 0.35 percent, at 9,080.09, after moving between 9,050.54 and 9,108.66. Turnover totaled NT$96.06 billion (US$3.0 billion) during the session. Cheap Stocks Pick Up The market opened up 5.36 points and rose to the day’s high as bargain hunters picked up cheap stocks, in particular in the high-tech sector, in the wake of 2.43 percent drop on the bourse Tuesday, dealers said.

But when the index briefly breached the 9,100-point mark, some investors shifted to the sell side, which capped the gains by the end of the session, dealers said.

��The limited upturn indicated that many investors were reluctant to chase prices amid worry over the debt problems in the eurozone and declining crude oil prices,�� President Securities analyst Vickie Hsieh said.

Debt-ridden Greece is scheduled to hold parliamentary elections Jan. 25 and if the anti-austerity opposition wins, the country may pull out of the eurozone, complicating the debt situation in Europe.

Crude prices in New York and in London continued to fall overnight, reaching the lowest level in more than five years.

��Technically speaking, the local market is faced with strong technical resistance at around 9,100 points,�� Hsieh said. ��Amid weak sentiment, it would not be easy for the bourse to hold above that level any time soon.��

She said the electronics sector got a boost from semiconductor stocks on a forecast by PNB Paribas that MediaTek (�p�o��) could benefit from strong demand for its octa-core smartphone chips and thus strengthen its bottom line in the second quarter.

After PNB Paribas issued a ��buy�� recommendation on MediaTek shares, the stock climbed 6.22 percent to close at NT$486.50.

Among the other IC stocks, Taiwan Semiconductor Manufacturing Co. (TSMC, �x�n�q), the most heavily weighted stock in the local market, rose 0.37 percent to end at NT$134.00, and United Microelectronics Corp. (�p�q) gained 0.34 percent to close at NT$14.80.

The flat panel sector attracted buying on the back of strong demand for TV screens, dealers said.

��There are signs that panel prices will continue to rise, so many suppliers have been hoardong some of their stock to sell at higher prices later,�� Hsieh said.

Among the gaining flat panel stocks, AU Optronics Corp. (�͹F) rose 2.91 percent to close at NT$17.70, and rival Innolux Corp. (�s��) added 1.57 percent to end at NT$16.20. Petrochemical Sector Bucking the upturn on the broader market, the petrochemical sector closed down 0.88 percent on falling crude prices.

Formosa Plastics Corp. (�x��) fell 0.72 percent to end at NT$68.50, and Nan Ya Plastics Corp. (�n�ȶ콦) dropped 1.13 percent to close at NT$61.10.

��After yesterday’s heavy losses, the local bourse has become technically weaker,�� Hsieh said. ��The local equity market may remain in consolidation mode for a while, but there’s a possibility that the index will test 9,000 points soon.��