Shares in Taiwan staged a technical rebound Tuesday to close above 13,100 points, as investors were encouraged by a rally on the United States markets overnight, dealers said.
Buying was seen almost across the board, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and other stocks in the bellwether electronics sector, as tech stocks on the U.S. markets made a significant comeback, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 158.63 points, or 1.22 percent, at 13,124.68 after moving between 12,978.13 and 13,143.15. Turnover totaled NT$198.07 billion (US$6.19 billion), as the market recovered from a 1.23 percent drop Monday.
The market opened up 0.84 percent Tuesday, in the wake of a 1.86 percent increase on the Dow Jones Industrial Average and a 3.43 percent rise on the tech-heavy Nasdaq index in the U.S. the previous day, but some profit taking eroded the Taiex’s gains in the morning session, dealers said.
During the afternoon session, however, buying reemerged, particularly among large-cap semiconductor stocks, and it spread to financial and old economy stocks, helping to boost the Taiex by more than 150 points by the end of trade, dealers added.
“The movement of the local stock market was again dictated by the U.S. markets today,” Mega International Investment Services Corp. analyst Alex Huang said. “It seemed that the fears over a hawkish Federal Reserve were allayed to some extent, which pushed up tech stocks at home and abroad.”
The local electronics sector rose 1.28 percent, with the semiconductor sub-index soaring 2.07 percent, after TSMC, the most heavily weighted stock on the local market, gained 2.52 percent to close at NT$407.00. TSMC’s gains contributed more than 80 points to the Taiex’s increase Tuesday.
Among other semiconductor stocks, power management IC designer Silergy Corp. surged 4.98 percent to end at NT$422.00, system in package (SIP) module supplier ShunSin Technology Holdings Ltd. gained 2.93 percent to close at NT$84.30, smartphone IC designer MediaTek Inc. rose 1.73 percent to end at NT$588.00, and United Microelectronics Corp. gained 1.32 percent to close at NT$38.25.
Dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. failed to ride the wave, however, and fell 0.71 percent to end at NT$55.80.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.43 percent to close at NT$103.50, while flat panel maker AU Optronics Corp. gained 1.11 percent to end at NT$18.20 after it decided to stabilize TV screen prices.
“Hon Hai’s Tech Day leads had already been priced in in recent sessions, when the stock was more resilient compared with the broader market,” Huang said, referring to the company’s unveiling of two new electric vehicle prototypes at its annual Tech Day event Tuesday.
In addition to the electronics sector, large non-tech stocks also attracted attention from bargain hunters, Huang said.
“I think the buying in the afternoon session came partly from government-led funds, which have entered the trading floor in recent sessions in a bid to bolster investor confidence after the Taiex’s recent heavy loses,” he said.
The financial sector rose 1.12 percent, led by Fubon Financial Holding Co., which climbed 3.70 percent to close at NT$50.50, while Cathay Financial Holding Co. gained 1.33 percent to end at NT$38.15.
Mega Financial Holding Co. ended up 1.54 percent at NT$29.70, and CTBC Financial Holding Co. closed 1.52 percent higher at NT$20.10.
“After their recent sharp falls, Fubon Financial and Cathay Financial have become attractive because of their low valuations,” Huang said, noting that prior to Tuesday, the two companies had lost 18.56 percent and 26.03 percent, respectively, since the beginning of July.
The petrochemical sector also attracted buying interest on Tuesday, rising 2.06 percent.
High density polyethylene resin (HDPE) USI Corp. soared 4.48 percent to close at NT$21.00, Nan Ya Plastics Corp. gained 3.57 percent to end at NT$66.80, Formosa Chemicals & Fibre Corp. rose 2.41 percent to close at NT$68.10, and Taita Chemical Co. ended up 2.09 percent at NT$19.50.
Elsewhere in the old economy sector, container cargo shipper Yang Ming Marine Transport Corp. rose 3.17 percent to close at NT$61.90, and rival Wan Hai Lines Ltd. gained 3.24 percent to end at NT$67.00, while bulk cargo shipper Sincere Navigation Corp. closed 2.22 percent higher at NT$18.40.
“Today’s gains helped the Taiex overcome the stiff technical resistance ahead of 13,022 points, which is the five-day moving average,” Huang said. “The main board may continue to climb until it approaches the next high technical hurdle of 13,400 points.”
Despite the gains in the Taiex, foreign institutional investors stayed on the sell side Tuesday, offloading a net NT$3.71 billion worth of shares on the main board, after a net sell of NT$8.77 billion the previous day, according to the TWSE.
Source: Focus Taiwan News Channel