Alexa
  • Directory of Taiwan

Taiwan shares lifted by late-session buying; GDP caution remains

Taiwan shares lifted by late-session buying; GDP caution remains

Taipei, July 31 (CNA) Shares in Taiwan got a boost from bargain hunting in the late trading session Friday, reversing earlier losses, while market sentiment remained wary of lower-than-expected gross domestic product (GDP) growth for the second quarter, dealers said.
The last-ditch buying focused on large-cap stocks in both the electronics and non-high-tech sectors, such as Taiwan Semiconductor Manufacturing Co. (TSMC), Formosa Plastics Corp., and Fubon Financial Holding Co., the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 13.85 points, or 0.16 percent, at 8,665.34, after moving between 8,591.37 and 8,676.27 on turnover of NT$85.90 billion (US$2.73 billion).
The market opened up 0.22 percent and rose to the day's high on follow-through buying from a session earlier, but with the index moving closer to 8,700 points, selling set in to push down share prices, the dealers said.
Minutes before the market closed, however, bargain hunters became active to pick up TSMC and other market heavyweights to vault the index back into positive territory and boost turnover to top NT$80 billion, they said.
"Since late April, the weighted index has fallen more than 1,000 points. That's why bargain hunting emerged to take advantage of low valuations, in particular of large-cap stocks," KGI Securities analyst Phil Chu said.
"Foreign institutional investors cut their short position contracts significantly in the futures market yesterday, another positive sign paving the way for a stable local equity market in the near term," Chu said, adding that foreign institutional investors owned an approximate net 6,000 short position contracts Thursday, down some 5,000 from a day earlier.
Benefitting from the late trading session, TSMC, the most heavily weighted stock in the local market, rose 0.72 percent to close at the day's high of NT$140.50, off an early low of NT$137.50, with 40.05 million shares changing hands.
Formosa Plastics gained 0.57 percent to close at the day's high of NT$70.00 after recovering from an early low of 68.50, while Fubon Financial added 0.52 percent to end at the day's high of 57.60, off an early low of 56.50.
"Although turnover was lifted by the late-session buying to some extent, the amount remained thin, as many investors stepped away from the trading floor as their sentiments were hurt by the second-quarter GDP growth," Chu said. "Weakening global demand has hurt Taiwan's electronics exports."
The latest GDP data shows that Taiwan's economy rose only 0.64 percent from a year earlier in the second quarter, lagging behind an earlier forecast of a 3.05 percent increase, after the country's exports contracted 1.30 percent.
"Amid cautious sentiment, it is possible that the local equity market will continue in consolidation mode over the next few sessions. And only if the index breaches 8,733 points -- the nearest technical resistance level -- the market will become technically healthier," Chu said. (By Frances Huang)


Updated : 2021-09-22 09:23 GMT+08:00