Taipei, Nov. 7 (CNA) Shares in Taiwan edged higher Tuesday, though investors took a bit of a breather after an extended rally in recent sessions that was triggered by optimism that the United States Federal Reserve has turned less hawkish, dealers said.
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, helped anchor and stabilize the broader market, dealers said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 35.59 points, or 0.21 percent, at the day’s high of 16,684.95 after hitting a low of 16,608.10. Turnover totaled NT$216.39 billion (US$6.72 billion), far below the NT$275.88 billion seen on Monday.
The market opened up 0.78 points and continued to move in a narrow range, reflecting a lackluster performance overnight in US markets, where the Dow Jones Industrial Average edged up 0.10 percent and the tech-heavy Nasdaq gained 0.30 percent, dealers said.
The Taiex was boosted by last ditch buying, however, with TSMC closing at the day’s high of NT$555.00, up 0.91 percent, and the Taiex exceeding the nearest technical resistance ahead of 16,679 points, the 120-day moving average.
But consolidation was still the main theme of the day, dealers said.
“Positive expectations that the Fed’s rate hike cycle is coming to an end have already been priced into shares after an extended market rally,” Mega International Investment Service Corp. analyst Alex Huang said.
The Taiex surged 4.66 percent from an intraday low of 15.975 on Oct. 31 to an intraday high of 16,720 points on Monday.
“TSMC, again, dictated the movement of the broader market, while the reduced turnover made it hard for such a large cap stock to make a real breakthrough,” Huang said, “The stock was also faced with high technical hurdles, while moving closer to the NT$556-NT$558 range.”
Led by TSMC, the electronics index rose 0.43 percent to close at the day’s high of 822.91, with the semiconductor sub-index closing 0.71 percent higher.
Among other semiconductor heavyweights, United Microelectronics Corp., a small contract chipmaker, ended unchanged at NT$49.40, and IC packaging and testing services provider ASE Technology Holding Co. fell 0.84 percent to close at NT$117.50.
Smartphone IC designer MediaTek Inc. rose 0.68 percent to end at NT$888.00 after the company unveiled its latest flagship Dimensity 9300 chipset that it said will make generative AI processing, gaming, and video capture using a smartphone more efficient.
“Optimism toward artificial intelligence development was also absorbed during the recent rally, so the major AI related stocks appeared mixed today,” Huang said.
Among these AI related stocks, AI server maker Quanta Computer Inc. lost 0.73 percent to close at NT$204.00, while rival Wistron Corp. rose 1.41 percent to end at NT$93.40.
In addition, LITE-ON Technology Corp., a maker of power management solutions for AI server use, lost 0.45 percent to close at NT$110.50, but Giga-Byte Technology Co., a leading graphics card vendor for AI applications, added 0.23 percent to end at NT$220.50.
Late session buying also helped select large cap old economy stocks recoup earlier losses, with China Steel Corp. losing 0.80 percent to close at NT$24.80, off a low of NT$24.50, and Formosa Plastics Corp. falling 0.64 percent to end at NT$78.10, off a low of NT$77.70.
Meanwhile, Tung Ho Steel Corp. rose 3.03 percent to close at NT$67.90 as the company said it has orders on hand that will not be fully shipped until the second quarter of next year.
The tourism industry extended its momentum from a session earlier, rising 0.88 percent as hotels and travel agencies posted strong sales during the Taipei International Travel Fair, which ended Monday.
Chateau International Development Co. and My Humble House Hospitality Management Consulting surged 10 percent, the maximum daily increase, to end at NT$54.10 and NT$47.30, respectively.
In the financial sector, which closed down 0.19 percent, Cathay Financial Holding Co. loses 0.33 percent to end at NT$45.20, while Fubon Financial Holding Co. closed unchanged at NT$61.50, and Mega Financial Holding Co. rose 0.13 percent to end at NT$38.60.
“Today’s low turnover also showed caution ahead of the speeches planned by Fed Chair (Jerome) Powell later this week,” Huang said.
Powell will speak to the Division of Research and Statistics’ centennial conference Wednesday and to the Jacques Polak Annual Research Conference on Thursday.
“In addition, TSMC is expected to report its October sales Friday, which will also be worth watching,” Huang said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$1.79 billion in shares on the market Tuesday.
(By Frances Huang)