Taipei: Shares in Taiwan closed slightly higher on Wednesday after giving up early gains amid caution ahead of the scheduled release of U.S. inflation data due out later this week, dealers said. The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 77.58 points, or 0.16 percent, at 47,183.36 after moving between 47,060.78 and 47,548.26. Turnover totaled NT$773.51 billion (US$24.56 billion), down from NT$922.66 billion on Tuesday.
According to Focus Taiwan, the Taiex moved higher early in the trading session on a rally in tech stocks, which benefited from a 1.30 percent increase in the Philadelphia Semiconductor Index overnight. However, profit-taking set in as the index approached the all-time intraday high of 48,218 points seen in June, said Mega International Investment Services analyst Alex Huang. Market sentiment remained cautious ahead of the release of U.S. consumer price index data, leading investors to secure their earlier gains, with TSMC being a focal point. The reduced turnover also reflected this cautious approach.
Despite a 2.35 percent increase in its American depositary receipts overnight, Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for more than 40 percent of the total market value, fell 0.20 percent to close at NT$2,465.00, down from the day's high of NT$2,490.00. Other major tech stocks also faced profit-taking, with MediaTek Inc. down 1.80 percent at NT$4,625.00 and Delta Electronics Inc. down 0.55 percent at NT$1,795.00. iPhone assembler and AI server maker Hon Hai Precision Industry Co. ended up 0.20 percent at NT$252.00, off a high of NT$254.00.
Funds rotating out of large-cap semiconductor stocks moved into selected electronic component stocks, including printed circuit board makers, Huang noted. Nan Ya PCB Co. soared 8.29 percent to close at NT$1,110.00, while Unimicron Technology Corp. gained 4.09 percent to end at NT$993.00. Meanwhile, the financial sector, which had risen 1.20 percent on Tuesday, fell 1.47 percent on Wednesday, with Fubon Financial Holding Co. down 1.34 percent at NT$147.00 and Cathay Financial Holding Co. down 2.64 percent at NT$110.50.
Dealers also observed buying interest rotating into certain old-economy stocks, led by the four major companies in the Formosa Plastics Group amid a spike in crude oil prices. Formosa Petrochemical Corp. surged 10 percent, the maximum daily increase, to close at NT$87.50. Formosa Plastics Corp. gained 2.46 percent to end at NT$66.70, Formosa Chemicals and Fibre Corp. rose 1.70 percent to NT$7.80, and Nan Ya Plastics Corp. ended up 0.64 percent at NT$236.50.
"I expect turnover will continue to stay low until the U.S. Federal Reserve wraps up its policymaking meeting next Wednesday (U.S. time), so the Taiex is unlikely to break out of its current consolidation," Huang stated. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$20.92 billion of shares on the main board Wednesday.