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Taiwan shares end flat

Taiwan shares end flat

Taipei, May 26 (CNA) Shares in Taiwan closed little changed Thursday as the broader market fell into consolidation mode after making a strong showing in the previous few sessions, dealers said.

With stiff technical resistance emerging after the weighted index breached the 8,400 point level at one point, many investors became reluctant to continue the buying seen earlier this week, while select stocks in the bellwether electronics sector remained resilient, preventing the main board from dropping further, they said.

The weighted index on the Taiwan Stock Exchange ended down 2.08 points, or 0.02 percent, at 8,394.12, after moving between 8,376.60 and 8,410.74, on turnover of NT$64.08 billion (US$1.97 billion).

The market opened up 4.69 points to breach 8,400 points, and moved to the day's high on the back of the gains posted by Wall Street, where the Dow Jones Industrial Average rose 0.82 percent, and the S&P 500 index gained 0.70 percent overnight, dealers said.

But, selling on the local main board soon followed, focusing on non-high tech stocks, in particular in the food and petrochemical sectors, to push down the weighted index into negative territory, while certain electronics stocks, such as contract chip maker Taiwan Semiconductor Manufacturing Co. and smartphone brand HTC Corp., steamed ahead to support the broader market, they said.

"After the solid gains posted in the previous sessions, the local equity market took a pause today," Concord Securities analyst Kerry Huang said. "Many investors turned cautious about a possible pullback ahead of the 240-day moving average at around 8,500 points. So after the index breached 8,400 points, selling emerged."

In the previous three sessions, the local main board rose 3.26 percent as investors were relieved after China did not react too negatively to President Tsai Ing-wen's (???) inaugural speech on May 20, in which she did not mention the "1992 consensus" Beijing wanted to hear.

"Investors now have shifted their attention to the monetary policy of the U.S. Federal Reserve, which has scheduled a policymaking meeting for mid-June. The local market has been nervous about whether the Fed will raise its key interest rates," Huang said.

In the old economy sector, Formosa Plastics Corp. fell 1.14 percent to close at NT$78.10, and Nan Ya Plastics Corp. lost 0.65 percent to end at NT$60.70, while food maker Uni-President Enterprises Corp. dropped 1.15 percent to close at NT$60.10.

Among the falling financial stocks, Fubon Financial Holding Co. fell 0.80 percent to end at NT$37.40, and Cathay Financial Holding Co. lost 0.54 percent to close at NT$37.00 amid worries that a rate hike by the Fed will send global equities in turmoil and hurt the overseas investments of these financial firms.

"Fortunately, we still had some electronics stocks in positive territory, like TSMC and HTC, and their upturn kept the broader market's trading in a narrow range," Huang said.

TSMC, the most heavily weighted stock in the local market, rose 0.32 percent to close at NT$155.00 amid optimism toward its development of high-end technology processes, while HTC rose 9.73 percent to end at NT$81.20 as a U.S. brokerage held an upbeat mood about the company's efforts in the virtual reality business.

"Today's turnover was thin. It was impossible for the main board to take off with such slow trading volume for the moment," Huang said. (By Frances Huang)

Updated : 2021-07-28 22:40 GMT+08:00