Taiwan shares end above 10,000 points, but gains capped

2019/02/11 16:46:51 fontsize-small fontsize-default fontsize-big
Taiwan shares end above 10,000 points, but gains capped

Taipei, Feb. 11 (CNA) Shares in Taiwan moved higher to close above the 10,000-point level Monday, led by strong buying in certain electronics heavyweights, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.

The gains were capped late in the session, however, as investors remained concerned by the lack of momentum in global economic fundamentals and the ongoing uncertainty over trade tensions between the United States and China, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended up 71.99 points, or 0.72 percent, at 10,004.25, after moving between 9,988.83 and 10,065.52. Turnover was NT$131.97 billion (US$4.28 billion).

The market opened up 0.98 percent to exceed 10,000 points in response to the upturn posted by markets in the United States while markets were closed in Taiwan between Jan. 31 and Feb. 10 for the Lunar New Year holiday, dealers said.

Over that time, the Dow Jones Industrial Average gained 2.14 percent, the S&P 500 rose 2.57 percent, and the tech-heavy Nasdaq gained 3.84 percent.

But after the Taiex hit Monday's high 10 minutes into the session, investors quickly shifted to the sell side, pulling down the Taiex to below 10,000.

It was only when buying in the electronics sector picked up at around 10:30 a.m. that the Taiex rebounded back above 10,000, where it stayed for the rest of the session.

"The market played catch-up throughout the session as investors were encouraged by the gains posted by U.S. markets during the holiday in Taiwan," Mega International Investment Services Corp. analyst Alex Huang said.

"But there was stiff technical resistance after the Taiex breached 10,000 points. It was no surprise the gains were limited as some investors pocketed their profits," Huang said, referring to the technical hurdles ahead of the 125-day moving average of 10,170.

Huang said the electronics sector was a key driver of the Taiex's gains Monday as investors scrambled to pick up large-cap stocks such as TSMC and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc.

TSMC, the most heavily weighted stock in the local market, rose 3.17 percent to close at NT$228.00 after hitting a high of NT$229.00, with 10.86 million shares changing hands.

Buying in TSMC was sparked by a 4.01 percent increase in its American depository receipts (ADRs) in the U.S. market from Jan. 31 to Feb. 10.

Led by TSMC, the electronics sector rose 1.71 percent and the semiconductor sub-index surged 2.69 percent.

Also in the tech sector, Largan gained 5.16 percent to close at the day's high of NT$3,975.00 after it posted consolidated sales of NT$3.35 billion in January.

That represented a 4 percent increase in January from a month earlier, compared with a 19.49 percent month-on-month decline in December.

Meanwhile, integrated circuit designer MediaTek Inc. rose 6.75 percent to end at the day's high of NT$259.50 as investors were optimistic about the company's efforts to develop chips for artificial intelligence applications.

"Despite the gains in the broader market, old economy and financial stocks appeared mixed, which further reined in the Taiex," Huang said.

In the petrochemical sector, which closed down 1.34 percent on a fall in international crude oil prices, Nan Ya Plastics Corp. fell 2.36 percent to end at NT$74.50, Formosa Chemicals & Fibre Corp. lost 2.82 percent to close at NT$104.00, and Formosa Plastics Corp. dropped 1.96 percent to end at NT$100.00.

The financial sector fell 0.28 percent, with CTBC Financial Holding Co. closing 1.21 percent lower at NT$20.45 and Fubon Financial Holding Co. losing 0.90 percent to end at NT$44.15.

"Investors remained nervous about the slowing pace of global economic growth, and they preferred to lock in their gains as the Taiex rebounded," Huang said. "The Washington-Beijing trade dispute also affected market sentiment.

"I expect the Taiex will test 10,000 again before closing well above that level," he said.

According to the TWSE, foreign institutional investors bought a net NT$13.05 billion in shares on the market Monday.

(By Frances Huang)
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