Taiwanese shares yesterday rallied after US markets posted sizeable gains on Friday, but the uptick was limited after the benchmark TAIEX rose above the 17,900 point mark, triggering selling almost across the board, in particular in select old economy stocks.
At the end of the session, the TAIEX closed up 152.85 points, or 0.87 percent, at 17,814.33. Turnover was NT$554.08 billion (US$19.78 billion), with foreign institutional investors buying a net NT$15.47 billion in shares on the main board, Taiwan Stock Exchange data showed.
“On Friday, US Treasury yields stopped falling as investors moved their funds back to the equity market, indicating reduced concerns over the economy,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
He was referring to a 1.3 percent rebound on the Dow Jones Industrial Average on Friday after a 0.75 percent fall on Thursday.
“In Taiwan, the market followed suit today, as the tech sector was boosted by rotational buying after a recent consolidation,” Huang said. “Today’s rebound left the market technically healthier after Friday’s 1.15 percent slide.”
After a 2.28 percent increase in its American depositary receipts, contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) rose 1.54 percent to close at NT$593.00.
“Investors are waiting for TSMC’s investor conference on Thursday for a clearer picture of its business prospects, so the stock still faces stiff technical resistance ahead of NT$600 at the moment,” Huang said.
The electronics sector rose 1.36 percent to close at 834.84 after hitting a high of 837.77, while the transportation sector, where many shipping heavyweights are traded, fell 0.31 percent to end at 345.41, off a high of 366.50.
“Shipping stocks largely came under pressure in the afternoon as investors locked in previous gains, but buying could resume as the industry should continue to benefit from a shortage of capacity,” Huang said.
Evergreen Marine Corp (長榮海運) fell 2.14 percent to close at NT$183.00, and bulk cargo shipper Sincere Navigation Corp (新興航運) lost 5.31 percent to close at NT$46.40.
“Only if the tech sector continues to attract strong buying with TSMC serving as the anchor will the TAIEX rise above 17,900 or even 18,000 points in the short term,” Huang said.
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