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Local bourse lifted by Wall Street gains

Local bourse lifted by Wall Street gains

Taipei, Jan. 8 (CNA) Shares in Taiwan got a boost from a gain on Wall Street to close higher Wednesday, as buying rotated to large-cap stocks in the bellwether electronics sectors, dealers said. However, the gains were capped by stiff technical resistance ahead of 8,600 points as investors remained cautious about an earnings season on Wall Street scheduled to kick off later in the month, the dealers said. The weighted index on the Taiwan Stock Exchange ended up 43.71 points, or 0.51 percent, at 8,556.01, after moving between 8,548.61 and 8,587.08, on turnover of NT$115.44 billion (US$3.85 billion). The market opened up 0.43 percent in a knee-jerk reaction to a gain on Wall Street overnight, and with buying in electronics heavyweights, such as Taiwan Semiconductor Manufacturing Co. (TSMC), accelerating, the index rose to the day's high, the dealers said. As the index moved closer to 8,600 points, some investors shifted to the sell side, locking in gains posted earlier in the session, they said. The trading volume breached the NT$100 billion mark for the first time since Oct. 3 last year, when turnover reached NT$115.80 billion after the government relaxed day trading rules, they added . "Judging from the turnover, the relaxation in day trading prompted more investors to come back to trade in the market. It seems that the new rules have helped the local bourse come out of the recent doldrums," Mega International Investment Services Corp. analyst Alex Huang said. As part of the government's efforts to lure back investors and boost daily turnover, investors now are allowed to conduct day trading (buying and selling a stock on the same day) in 200 large- and mid-cap stocks, starting from Jan 6. Before the rule change, day trading was allowed only for margin trading or short selling. "The expanded turnover showed that investors preferred to pick up large-cap stocks to push the index higher before profit-taking set in to cap the gains," Huang said. Among the gaining market heavyweights, TSMC, the most heavily weighted stock in the local market, gained 1.96 percent to close at NT$104.00 as investors took advantage of its relatively low valuation after recent consolidation. Advanced Semiconductor Engineering Inc., one of Taiwan's leading integrated circuit packaging and testing services providers, rose 4.10 percent to close at NT$27.90 after reporting record high sales in 2013. Nanya Technology Corp. and Inotera Memories Inc., two DRAM makers, rose a maximum of 7 percent, and 6.56 percent, respectively, to end at NT$5.49 and NT$26.00 after U.S.-based counterpart Micron Technology Inc. reported better-than-expected quarterly results. Bucking the upside, smartphone camera lens supplier Largan Precision Co. fell 3.81 percent to close at NT$1,135.00 amid speculation that Apple Inc's next-generation iPhone will still use the same 8 megapixel camera as its predecessor, rather than a 13-megapixel device, which could depress the Taiwanese company's profit margin. In the old economy sector, Formosa Plastics Corp. fell 0.51 percent to end at NT$78.00, while textile maker Far Eastern New Century Corp. gained 1.51 percent to close at NT$33.60. "Many investors have kept a close eye on the earnings season in the U.S. as they fear that any negative leads will have an impact on the local bourse," Huang said. "I think the index will move between 8,500 points and 8,600 points over the next few sessions." (By Frances Huang)


Updated : 2021-08-04 22:07 GMT+08:00