Taipei, Feb. 17 (CNA) Shares in Taiwan closed slightly lower after moving within a narrow range on Friday amid cautious sentiment ahead of stiff technical resistance at the 9,800 point mark, dealers said.
Large cap high-tech stocks were largely lackluster throughout the trading session as investors took their cue from Wall Street overnight, with buying focusing on small cap stocks, particularly the green energy sector, such as light-emitting diode (LED) suppliers, they said.
The weighted index on the Taiwan Stock Exchange closed down 11.49 points, or 0.12 percent, at 9,759.76, after moving between 9,754.54 and 9,791.59, on turnover of NT$94.25 billion (US$3.06 billion).
The market opened up 7.91 points and soon rose to a high for the day on a mild technical rebound from a fall on Thursday. However, it was then in consolidation mode for the rest of session, closing slightly lower, with many market heavyweights moving in slow trading on a lack of indications from Wall Street, where the Dow Jones Industrial Average closed up only 0.04 percent overnight, dealers said.
"After recent strong gains, the local main board has faced stiff technical resistance ahead of 9,800 points," KGI Securities analyst Phil Chu said, referring to the market's failed attempts to pass that level on Wednesday and Thursday.
"But, the silver lining was that today's fall came with a slightly reduced turnover, indicating that selling pressure was not intolerable at all. Many investors remain willing to hold onto their stocks for the moment, expecting another take-off," Chu said.
The bellwether electronics sector closed flat as shares in contract chip maker Taiwan Semiconductor Co. (TSMC, 台積電), the most heavily weighted stock on the local market, moved 0.26 percent higher to end at NT$189.50, offsetting the impact from losses incurred by other large cap high-tech stocks.
"TSMC served as an anchor stabilizing the broader market. I expect TSMC will challenge the nearest technical resistance at around NT$193 due to its sound fundamentals. As long as TSMC posts more gains, the broader market will follow," Chu said.
Also in the electronics sector, Largan Precision Co. (大立光), a smartphone camera lens supplier to Apple Inc., fell 0.66 percent to close at NT$4,530.00 but remained the most expensive stock in Taiwan, and shares in Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads, shed 1.10 percent to end at NT$90.00.
Among small cap stocks in the green energy sector, shares in LED lighting maker Epistar Corp. (晶電) soared 10 percent, the maximum daily increase, to close at NT$26.45, and Everlight Electronics Co. (億光) gained 5.04 percent to end at NT$50.00.
"These LED stocks benefited from rotational buying and such rotational interest prevented the local main board from falling further. So I think that after consolidating for a while, the weighted index is likely to resume an uptrend to challenge 9,800 points," Chu said.
In the old economy sector, shares in food maker Uni-President Enterprises Corp. (統一) fell 0.72 percent to close at NT$55.10, while China Steel Corp. (中鋼), the largest steel maker in Taiwan ended unchanged at NT$25.90.
The local equity market will open on Saturday to make up for the loss of a business day due to a lengthened national holiday scheduled for next week.
(By Frances Huang)