Taiwan shares rebound but end day below 9,800 point

TAIPEI (CNA) — Shares in Taiwan bounced back on Jan. 17 from a session earlier, led by the bellwether electronics sector, but the main board still closed below the 9,800 point mark, dealers said.

While chipmaker Taiwan Semiconductor Manufacturing (TSMC) moved higher, lending support to the broader market, turnover remained thin as many investors appeared reluctant to chase prices ahead of an investor conference scheduled by TSMC later in the day, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 25.34 points, or 0.26 percent, at 9,789.15, after moving between 9,759.51 and 9,826.25, on turnover of NT$90.86 billion (US$2.95 billion).

The market opened up 9.50 points and soon rose to the day’s high in the early morning session on the back of a higher Wall Street, where the Dow Jones Industrial Average closed up 0.59 percent overnight, dealers said.

However, with the Taiex passing the 9,800 point mark at one point, some investors shifted to the sell side, capping the gains by the end of the session amid caution toward corporate fundamentals before TSMC’s investor conference, they said.

“Trading volume was low, making it hard for the main board to gain further as many investors are waiting for TSMC’s fourth-quarter results and guidance for the first quarter of this year,” Ta Ching Securities analyst Jerry Chen said.

“In addition, technical resistance ahead of 9,800 points remained strong, limiting the upturn. But the silver lining is that the Taiex continues to stay above the 60-day moving average of around 9,741 points so the main board remained technically healthy.”

Chen said the electronics sector served as an anchor stabilizing the broader market with TSMC, the most heavily weighted stock on the local market, up 1.38 percent to close at NT$220.50 with 21.14 million shares changing hands.

“The market had high hopes TSMC would give better than expected sales guidance for the first quarter. But, investors were still waiting for real numbers,” Chen said. After the equity market closed, TSMC reported its net profit for 2018 hit a new high of NT$351.13 billion, up 2.3 percent from a year earlier, with earnings per share at NT$13.54, compared with NT$13.23 in 2017.

Led by TSMC, the bellwether electronics sector gained 0.32 percent and the semiconductor sub-index rose 0.87 percent.

Among other gaining tech stocks, iPhone assembler Hon Hai Precision Industry Co. rose 0.28 percent to close at NT$70.40, power management solution provider Delta Electronics Inc. grew 0.33 percent to end at NT$150.00, and flat panel maker Innolux Corp. added 0.48 percent to close at NT$10.40.

Bucking the upturn on the broader market, shares in Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., fell 0.84 percent to end at NT$3,540.00.

Despite the gains in the Taiex, Chen said, non-high tech stocks appeared mixed throughout the session.

Formosa Chemicals & Fibre Corp. rose 0.95 percent to close at NT$106.50, while Formosa Petrochemical Corp. ended unchanged at NT$109.00 and textile maker Far Eastern New Century Corp. fell 0.34 percent to close at NT$28.95.

In the financial sector, which ended up 0.24 percent, shares in Cathay Financial Holding Co. rose 0.46 percent to close at NT$43.80, but E. Sun Financial Holding Co. lost 0.24 percent to end at NT$20.95.

“I expect the main board will continue its narrow range of trading before the prolonged Lunar New Year holiday (in early February) as investors fear external negative factors could come out during the holiday,” Chen said, referring to on-going trade tension between the United States and China.

Even if the market encounters any pullback, the nearest technical resistance is expected to be seen at around 9,600 points, Chen said.

According to the TWSE, foreign institutional investors bought a net NT$1.18 billion worth of shares on the main board on Thursday.

By Frances Huang