Taiwan stocks end but caution remains as Fed meets

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Taipei, Nov 3 (CNA) Taiwan stocks closed higher on Wednesday, but gains were limited by investor cautiousness ahead of the conclusion of the US Federal Reserve policy meeting later today, brokers said.

Large tech stocks continued to move within a narrow range while some old economy stocks attracted spin-off buying, providing some support to the broader market, they said.

The Taiex, the benchmark of the Taiwan Stock Exchange, ended up 56.19 points, or 0.33%, at 17,122.16, after moving between 17,080.51 and 17,153.76. Sales totaled NT $ 326.099 billion (US $ 11.69 billion).

Market opened 0.13% and hit the day’s high early in the session in reaction to market rallies in the United States, where the Dow Jones Industrial Average finished above the 36,000 point mark for the first time overnight, dealers said.

As the Taiex moved closer to the closest technical resistance level before 17,200 points, investors appeared reluctant to chase price, limiting the day’s gains, they said.

“The Fed meeting was the most important factor in the performance of regional markets, including Taipei, today,” said Alex Huang, analyst at Mega International Investment Services Corp.

“Although the market widely expected that the Fed will announce that it will cut back on its asset purchases, investors still wanted to know how quickly this would happen and when the purchases would end, hoping to have clues about the. when the Fed would raise interest rates, ”Huang said.

Investor caution has led to little movement among the tech heavyweights, Huang said, citing contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the heaviest stock in the market, which closed unchanged at NT $ 592.00.

“Without a breakthrough from TSMC, it was no surprise that the Taiex remained in consolidation mode,” said Huang. “It had nothing to do with TSMC’s fundamentals. Investors were just worried that the prospect of higher interest rates would make large tech stocks less attractive.”

Also in the semiconductor industry, United Microelectronics Corp., a smaller contract chipmaker, rose 0.34% to close at NT $ 59.20, and integrated circuit designer MediaTek Inc. gained 0.43% to end at NT $ 932.00.

Integrated circuit packaging and testing service provider ASE Technology Holding Co. fell 0.51% to close at NT $ 98.30.

Another electronics heavyweight, iPhone assembler Hon Hai Precision Industry Co., closed unchanged at NT $ 107.50.

“The silver lining is that rotational buying has remained active. Today, some electronic component makers have received a boost due to their relatively low valuations,” Huang said.

Among them, the supplier of capacitors and resistors Walsin Technology Corp. climbed 10%, the maximum daily increase, to close at NT $ 158.00, and Yageo Corp., the world’s third largest multilayer ceramic capacitor (MLCC) manufacturer, rose 3.05% to complete at NT $ 19.95.

In the flat panel display industry, which had been hit hard by falling product prices, AU Optronics Corp. gained 5.00% to close at NT $ 19.95, and Innolux Corp. added 1.81% to close at NT $ 16.80.

As for the old economy sector, the transport industry continued its technical rebound, gaining 5.13%.

Within the industry, Evergreen Marine Corp., Taiwan’s largest freight forwarder, closed up 6.67% at NT $ 112.00, and rivals Wan Hai Lines Ltd. and Yang Ming Marine Transport Corp. NT $ 171.50 and NT $ 108.50.

“Many investors are still betting on the shipping companies which post good profits for the third quarter due to an increase in freight rates,” said Huang. “But I wouldn’t suggest continuing to buy these stocks because their growth momentum has weakened.”

Elsewhere, textile brand Far Eastern New Century Corp. rose 0.34% to close at NT $ 29.55, and Eclat Textile Co. fell 2.14% to close at NT $ 594.00.

In the financial sector, which rose 0.18%, Cathay Financial Holding Co. gained 0.35% to close at NT $ 57.60, and Fubon Financial Holding Co. added 0.14% to close at 72 , NT $ 70.

“We need to closely monitor developments in US markets after the Fed meeting ends. The Taiwan market tomorrow will be determined by these external factors,” Huang said.

According to the TWSE, foreign institutional investors on Wednesday bought NT $ 3.89 billion net of shares.

(By Frances Huang)

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