Taipei, July 30 (CNA) Stocks in Taiwan closed slightly higher on Tuesday after initial losses, but sentiment remained cautious ahead of the U.S. Federal Reserve’s two-day policy meeting starting later in the day, traders said.
Bargain hunters rushed to buy big technology stocks in the second half of the session, pushing the broader market into positive territory toward the end of the trading day, traders said.
The Taiex, the benchmark weighted index of the Taiwan Stock Exchange, closed up 59.08 points, or 0.27 percent, at 22,223.57 after moving between 21,833.85 and 22,276.39. Turnover totaled NT$384.95 billion (US$11.72 billion).
The market opened down 0.54 percent and bottomed at around 10:30 a.m., following disappointing U.S. markets, where the Dow Jones Industrial Average lost 0.12 percent and the tech-heavy Nasdaq index rose 0.07 percent overnight, traders said.
When the Taiex dipped below 22,200, investors who simply wanted to buy on the dip jumped in, targeting tech giants to keep the market moving higher until the end of the session, traders said.
“The small swings in US markets and initial losses in the local market reflect caution ahead of the Fed meeting,” said analyst Alex Huang of Mega International Investment Services Corp.
While investors around the world expect the US central bank to leave key interest rates unchanged this time, “markets just want some signals from the Fed to judge whether a rate-cutting cycle will start as early as September,” Huang said.
After heavy losses in recent sessions, Huang said, bargain hunters became active on Tuesday. Before Tuesday, the Taiex had lost 867.76 points, or 3.77 percent, since the beginning of the month.
“Large technology companies such as TSMC (Taiwan Semiconductor Manufacturing Co.) and Hon Hai Precision Industry Co. were the main targets of bargain hunters,” Huang said.
“I wouldn’t rule out that government-led funds were among the bargain hunters in an attempt to push the Taiex past technical hurdles and above the 60-day moving average of 22,274 points, which the index was below today,” Huang said.
After recovering from the day’s low of NT$926.00, TSMC, the most heavily weighted stock in the local market, closed 0.40 percent lower at NT$940.00. TSMC’s recovery saw the Taiex recover around 113 points by the end of the session.
iPhone assembler Hon Hai, also known as Foxconn in the global market and second only to TSMC in terms of market value, returned to positive territory, rising 1.55 percent to close at NT$196.00.
Among other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 1.21 percent to close at NT$1,255.00, and IC packaging and testing service provider ASE Technology Holding Co. rose 1.30 percent to close at NT$155.50.
According to Huang, the optoelectronics sector is in high demand. The sub-index rose 2.76 percent, providing additional support to the broader market.
In the sector, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 5.05 percent to close at NT$2,915.00, while flat-panel display makers AUO Corp. and Innolux Corp. rose 2.25 percent and 3.27 percent, respectively, to close at NT$18.20 and NT$15.80.
“Old economy stocks largely traded within a narrow range, but transportation and construction stocks were an exception and attracted solid rotational buying throughout the session,” Huang said.
In the transportation sector, the share price rose 2.10 percent. Evergreen Marine Corp., the largest container freight forwarder in Taiwan, rose 3.09 percent to close at NT$167.00.
Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. rose 3.83 percent and 4.53 percent respectively to close at NT$62.30 and NT$76.20.
The construction index closed 2.15 percent higher.
King’s Town Construction Co. rose 10 percent, the biggest daily gain, to close at NT$102.50, and JSL Construction & Development Co. rose 5.58 percent to close at NT$208.00.
In addition, Huaku Development Co. rose 5.26 percent to close at NT$170.00, and Highwealth Construction Corp. closed up 1.75 percent to NT$64.10.
In the financial sector, which underperformed the broader market to close 0.89 percent lower, Fubon Financial Holding Co. lost 0.80 percent to close at NT$86.50. Cathay Financial Holding Co. fell 1.59 percent to close at NT$61.70.
China Development Financial Holding Co. withstood the downturn to close 0.95 percent higher at NT$16.00.
In addition to the Fed factor, “investors should closely monitor how US markets react to earnings reports from tech giants this week, as Taiwan’s tech stocks will follow suit,” Huang said.
Microsoft will report results on Tuesday, Meta Platforms on Wednesday, and Apple and Amazon on Thursday.
According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$23.61 billion worth of shares in the market on Tuesday.
(By Frances Huang)
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