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Local bourse stages mild technical rebound

Local bourse stages mild technical rebound

Taipei, Jan. 7 (CNA) Shares in Taiwan staged a technical rebound Tuesday alongside regional equity markets like those in Seoul and Singapore from weak performance across Asia seen Monday, dealers said. The upturn in the local bourse, however, was limited as foreign institutional investors remained cautious about the market outlook, building up a large number of short-position contracts in the futures market, they said. The weighted index of the Taiwan Stock Exchange closed up 12.29 points, or 0.14 percent, at 8,512.30 off an early high of 8,547.19, on turnover of NT$95.65 billion (US$3.19 billion). The market opened up 0.18 percent and moved to the day's high as investors took cues from gains posted in several regional markets, but as the index moved closer to the 8,600 point mark, some investors shifted to the sell side to lock in their earlier gains, dealers said. Large-cap electronics stocks in the bellwether electronics sector showed unimpressive performance on caution among foreign institutional investors, while buying rotated to small-cap stocks, particularly LED lighting stocks, but failed to give a significant boost to the index, they said. Grand Fortune analyst Chen Wei-tai said that foreign institutional investors have built up more than 5,800 short-position contracts in the futures market, indicating they have turned very cautious about the outlook of the spot market. "Many foreign investors have feared that Wall Street could suffer a major pullback any time after it has repeatedly hit fresh highs, so they have become reluctant to buy into local market heavyweights for the time being," Chen said. "As long as large cap stocks, especially those in the electronics sector, remained in the doldrums, it was not easy for the broader market to make a significant comeback," Chen said. Among the large-cap high-tech stocks, Taiwan Semiconductor Manufacturing Co., fell 0.49 percent to close at NT$102.00, while integrated circuit designer MediaTek Inc. shed 3.01 percent to end at NT$418.50 after Citigroup Global Markets said the IC designer could face price competition in China. Bucking the downward slide, Siliconware Precision Industries Co. gained 0.99 percent to close at NT$35.85 after the IC packaging and testing services provider posted better-than-expected consolidated sales for the fourth quarter. In the LED lighting business, Edison Opto Corp. rose 2.31 percent to end at NT$35.50, and Epistar Corp. gained 6.09 percent to close at NT$62.90. The gains of these small and mid-cap stocks were not strong enough to lift the broader market out of the current narrow range, however. In the old economy sector, Taiwan Cement Corp. rose 1.26 percent to close at NT$44.15, while Formosa Plastics Corp. fell 0.76 percent to end at NT$78.40, and food maker Uni-President Enterprises Corp. closed down 0.19 percent at NT$53.40. "I expect the weighted index will continue to move in ranged trade over the next few sessions as investors have held their breath, waiting for the December non-farm payroll data from Washington due Friday," Chen said. (By Frances Huang)


Updated : 2021-04-21 05:05 GMT+08:00