Taiwan shares end up but gains limited

2018/02/12 16:18:36 fontsize-small fontsize-default fontsize-big
Taiwan shares end up but gains limited

Taipei, Feb. 12 (CNA) Shares in Taiwan closed higher Monday after a more than 300-point rebound staged by the Dow Jones Industrial Average at the end of last week, but the upturn was limited amid worries over further volatility in U.S. markets, dealers said.

Concerns that the U.S. Federal Reserve will raise its key interest rates at a faster pace than expected and caution ahead of the upcoming Lunar New Year holiday kept investors in Taiwan from chasing prices, holding down turnover for the session, they said.

The weighted index on the Taiwan Stock Exchange, the Taiex, ended up 49.34 points, or 0.48 percent, at 10,421.09, after moving between 10,416.01 and 10,473.51, on turnover of NT$106.59 billion (US$3.64 billion).

Monday was the last trading session before the six-day Lunar New Year holiday that starts Thursday in celebration of the arrival of the Year of the Dog. Trading will resume on Feb. 21.

On Monday, the Taiex opened up 0.55 percent and quickly moved close to the day's high, sparked by the Dow's 1.38-percent, 330.44-point rebound Friday from a 4.15 percent fall the previous day, dealers said.

Large-cap stocks across the board benefited from the rebound, but with the Taiex moving closer to the nearest point of technical resistance at 10,500 points, some investors chose to pocket gains, limiting the market's upswing, they said.

"It's too early to say when the U.S. market will stabilize at a time when market sentiment remains anxious over the possibility of a quicker rate hike cycle by the U.S. Federal Reserve," Concord Securities analyst Kerry Huang said.

There are concerns that the Fed will raise interest rates four times this year instead of the previously anticipated three, in particular after Washington reported strong job data for January.

"Only if Wall Street stages a meaningful rebound and turns stable can the local market trade in a steady manner any time soon," Huang said. "It was no surprise that some investors here pocketed earlier gains in a bid to prevent further losses."

Among the gaining market heavyweights, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in Taiwan, closed up 1.72 percent at NT$236.50 after hitting a high of NT$237.50, with 35.61 million shares changing hands.

"TSMC attracted buying as many investors expect the chipmaker will issue a cash dividend of at least NT$8 on its 2017 earnings," Huang said. TMSC issued a cash dividend of NT$7 per share on its 2016 earnings.

"Based on today's closing price, that would represent a dividend yield of around 3.4 percent, much higher than local time deposit rates."

iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, underperformed the broader market, gaining only 0.11 percent to close at NT$87.60.

Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., gained 2.94 percent to end at NT$3,680.00, while Catcher Technology Co., a metal casing maker for Apple devices, bucked the upturn, closing down 2.70 percent at NT$324.50.

As a whole, the bellwether electronics sector ended up 0.58 percent.

In the financial sector, which ended up 1.07 percent on its relatively low valuations, Fubon Financial Holding Co. added 1.59 percent to close at NT$51.00, and China Development Financial Holding Co. rose 3.50 percent to end at NT$10.35.

"Many investors preferred to stay on the sidelines or just lock in their gains for the time being since they fear negative leads will emerge in the global markets during the New Year holiday," Huang said.

"We have to watch closely how Wall Street will perform during that time."

(By Frances Huang)
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