Taiwan shares close higher, but gains capped

2017/09/12 16:17:13 fontsize-small fontsize-default fontsize-big
Taiwan shares close higher, but gains capped

Taipei, Sept. 12 (CNA) Shares in Taiwan closed higher on a rebound staged by Wall Street overnight, but gains on the local equity market were limited as some investors shifted to the sell side amid fears over a fund flight, dealers said.

Large-cap stocks in the bellwether electronics sector served as an anchor to help the broader market move above the previous closing level throughout the session to end higher than the 10,600-point mark, the dealers said.

The weighted index on the Taiwan Stock Exchange closed up 38.19 points, or 0.36 percent, at 10,610.35, after moving between 10,586.28 and 10,646.55, on turnover of NT$124.52 billion (US$4.15 billion).

The market opened up 0.36 percent and moved to the day's high on the back of the strength of Wall Street, where the Dow Jones Industrial Average gained more than 250 points, or 1.19 percent, and the S&P 500 index rose 1.08 percent to hit a record high amid eased concerns over the impact of Hurricane Irma, the dealers said.

With the index breaching the 10,600-point mark, some selling set in as investors locked in their earlier gains to limit the upside before late-session buying emerged to help the weighted index get back to that level by the end of the session, they said.

"Like other markets in the region, the local stock market seemed to fail to react significantly to Wall Street's strong rebound overnight," Mega International Investment Services Corp. analyst Alex Huang said.

"What haunted investors was a strong rebound staged by the U.S. dollar overnight. Many investors are afraid that the greenback's rebound could continue, paving the way for foreign fund outflows from the region, which is the last thing the equity market wants to see," Huang said.

Huang added that geopolitical unease caused by North Korea's recent nuclear bomb test continued to affect investor sentiment, keeping them from chasing prices.

Fortunately, Huang said, the high-tech sector attracted buying interest, with large-cap suppliers to Apple Inc. regaining footholds, which pushed up the broader market ahead of an expected debut of the next- generation iPhones later in the day.

According to Huang, the bellwether electronics sector, which closed up 0.48 percent, accounted for about 66 percent of Tuesday's total turnover.

Among the gaining high-tech stocks, contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, rose 0.92 percent to close at NT$219.00, and iPhone assembler Hon Hai Precision Industry Co. (鴻海), second to TSMC in terms of market capitalization, rose 0.86 percent to end at NT$117.00. The two firms are among the most important suppliers to Apple.

Also in the electronics sector, PC brand Asustek Computer Inc. (華碩) rose 2.82 percent to close at NT$255.00 and Quanta Computer Inc. (廣達), the world's largest contract notebook maker, gained 0.89 percent to end at NT$68.30.

In the mixed old economy sector, food brand Uni-President Enterprises Corp. (統一) fell 0.77 percent to close at NT$64.60, while Eclat Textile Co. (儒鴻) rose 1.02 percent to end at NT$347.50.

"Without the electronics sector posting significant gains, the broader market is expected to move in a narrow range, with the nearest technical resistance ahead of 10,650 points," Huang said.

(By Frances Huang)

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