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Taiwan shares edge up on late session buying

Taiwan shares edge up on late session buying

Shares in Taiwan closed slightly higher Tuesday as buying emerged late in the trading session, helping the broader market recoup its earlier losses and return to positive territory, dealers said.

The late-session buying focused on large-cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC), Formosa Plastics Corp., and Cathay Financial Holding Co. in the electronics and old economy sectors, boosting the index by the end of the session, dealers said.

Turnover remained thin as many investors stayed on the sidelines, closely watching the movement of international crude oil prices, which could send ripples through the equity markets worldwide, including Taiwan, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 10.57 points, or 0.13 percent, at 8,292.74, after moving between 8,261.72 and 8,316.44. Turnover totaled NT$76.86 billion (US$2.34 billion) during the session.

The market opened up 0.86 points and rose to the day's high as investors picked up shares, taking cues from a rebound on Wall Street, where the Dow Jones Industrial Average closed up 0.72 percent, dealers said.

But as the index briefly breached 8,300 points, selling set in, pushing the broader market into the red before the late session buying in select market heavyweights helped boost the index to a level above the previous close, dealers said.

"Judging from the gains posted by the large-cap stocks late in the trading session, I suspect that foreign institutional investors served as the main buyers since they kept a number of long position contracts in the local futures market," MasterLink Securities analyst Tom Tang said. According to Tang, foreign institutional investors held about a net 13,000 long position contracts as of Monday.

"Foreign investors were simply hunting large-cap stocks like TSMC to boost the spot market in a bid to profit in the futures market," Tang said. According to the TWSE, foreign institutional investors bought a net NT$1.56 billion worth of shares Tuesday.

TSMC, the most heavily weighted stock on the local market, was boosted by last minute buying orders of about 5 million shares, according to Tang. Recovering from an early low of NT$140.50, TSMC rose 0.4 percent to close at NT$142.00, with 17.13 million shares changing hands.

Similar late-session buying also lifted other market heavyweights. Formosa Plastics gained 0.8 percent to close at NT$73.00 off an early low of 72.10. Nan Ya Plastics Corp. rose 0.7 percent to end at NT$58.60 off an early low of 58,00, and Cathay Financial added 0.6 percent to close at NT$43.35, recovering from an early low of 43.00.

Bucking the upturn of the broader market, dynamic random access memory (DRAM) chip maker Nanya Technology Corp. fell by the maximum daily 10 percent to close at NT$51.80 after reporting a 71.39 percent year-on-year drop in net profit for November.

"Although the broader market ended in positive territory on the gains posted by large-cap stocks, turnover remained low," Tang said. "Many investors appeared reluctant to raise their holdings amid fears over volatility in the global financial markets."

Since international crude oil prices in London dipped to an 11-year low Monday, "market sentiment has turned very cautious amid deepening concerns about a possible cut of Middle East funds in holdings of global equities to offset the effects of falling oil prices," Tang said.

He said the low trading volume Tuesday also reflected political uncertainty ahead of Taiwan's presidential election on Jan. 16, 2016. (By Frances Huang)

Updated : 2021-09-26 03:37 GMT+08:00