Shares in Taiwan moved higher Wednesday despite turnover remaining thin ahead of the conclusion of a United States Federal Reserve policymaking meeting later in the day.
The bellwether electronics sector continued to drive gains on the broader market after recouping earlier losses, as uncertainty over the Fed’s decision weakened old economy and financial stocks.
The Taiex, the Taiwan Stock Exchange’s (TWSE) weighted index, ended up 62.96 points, or 0.48 percent, at the day’s high of 13,100.17 after coming off a low of 13,014.04. Turnover totaled NT$154.28 billion (US$4.80 billion).
The market opened down 4.06 points and moved in a narrow range for most of the trading session in the wake of the losses on the U.S. markets, where the Dow Jones Industrial Average lost 0.24 percent, and the tech-heavy Nasdaq index fell 0.89 percent.
Buying emerged after the mid-morning session and accelerated in the late session as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) got a boost to lift the broader market above the 13,000-point mark by close.
With TSMC, the local market’s most heavily weighted stock, closing up 0.89 percent at the day’s high of NT$395.00, the electronics sector also increased 0.90 percent to end at 549.43.
“Again, the tech sector lent support to the local main board on bargain hunting today after recent steep losses,” Mega International Investment Services Corp. analyst Alex Huang said.
“But, trading remained light as many investors stayed alert before the Fed’s decision,” Huang added.
Huang said the market has widely anticipated that the U.S. central bank will raise its key interest rates by another 75 basis points.
“Few will expect the Fed will turn dovish anytime soon amid high inflation at a time when the U.S. job market stays solid,” Huang added.
The latest Job Openings and Labor Turnover Survey showed job openings unexpectedly rose in September in the United States to 10.7 million from 10.28 million last month.
Huang said investors in Taiwan left behind the losses incurred by the U.S. stock markets overnight to seek out bargains in the electronics sector.
“But, with turnover at low, it was no surprise that the tech sector and the Taiex moved in ranged trade,” Huang added.
Among other semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, rose 0.77 percent to end at NT$39.35, while rival Powerchip Semiconductor Manufacturing Corp. gained 2.12 percent to close at NT$31.30.
Bucking the upward trend, IC packaging and testing services provider ASE Technology Holding Co. ended unchanged at NT$80.00, while power management IC designer Silergy Corp. lost 0.76 percent to close at NT$389.50.
iPhone assembler Hon Hai Precision Industry Co. added 0.49 percent to end at NT$102.00, with power management solution provider Delta Electronics Inc. rising 2.87 percent to close at NT$268.50, and WUS Printed Circuit Co. adding 2.84 percent to end at NT$23.55.
“Concerns over an aggressive Fed also took a toll on many old economy stocks throughout the session,” Huang said.
Textile brand Far Eastern New Century Corp. lost 1.23 percent to close at NT$32.05, and Formosa Plastics Corp. fell 0.60 percent to end at NT$82.80.
China Steel Corp., the largest steel maker in Taiwan, gained 0.74 percent to close at NT$27.20, while China Steel Structure Corp. fell 0.19 percent to end at NT$53.50.
In the financial sector, which lost 0.47 percent, CTBC Financial Holding Co. lost 1.18 percent to close at NT$20.85, Mega Financial Holding Co. fell 1.34 percent to end at NT$29.35, while Cathy Financial Holding Co. rose 1.05 percent to close at NT$38.50.
“While I anticipate that the Fed will continue its rate hike cycle [having already hiked key rates by 300 basis points since March], the decision in the meeting to come up later today will help to remove uncertainty from the market for now,” Huang said.
Huang added that he “expects the market will steam ahead on a technical rebound” in the aftermath of a Fed announcement.
Despite the gains on the Taiex, foreign institutional investors sold a net NT$519 million worth of shares on the main board Wednesday, according to the TWSE.
Source: Focus Taiwan News Channel