Taiwan shares end above 17,000 points on semiconductor gains

Shares in Taiwan moved sharply higher Wednesday to close above the 17,000-point mark as investors reacted to the gains posted by markets in the United States overnight, dealers said.

The bellwether electronics sector led the upturn, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) drawing strong interest on reports of planned price hikes, and shipping stock gains also boosted the benchmark Taiex, they said.

The Taiex ended up 227.13 points, or 1.35 percent, at the day's high of 17,045.86, after hitting a low of 16,821.08. Turnover totaled NT$358.67 billion (US$12.86 billion).

It was the first time the Taiex closed above the 17,000-point mark since Aug. 12, when the index ended at 17,219.94.

The market opened relatively flat, but picked up steam after TSMC began to surge on the reports it would raise prices amid an ongoing global semiconductor shortage, dealers said.

The gains posted by the electronics sector also reflected the new record high achieved by the tech-heavy Nasdaq index, which closed 0.52 percent higher overnight, dealers added.

The local electronics sector rose 1.60 percent, with the semiconductor sub-index up 2.08 percent.

"Thanks to TSMC, the market vaulted over the technical hurdles ahead of 16,984 points, the 120-moving average, and finished above the 17,000-mark, which left it technically healthier," Hua Nan Securities analyst Kevin Su said.

TSMC rose 2.27 percent to close at the day's high of NT$585.00 as local media reports cited anonymous sources as saying the chipmaker will raise the prices for its chips by 10-20 percent. TSMC declined to comment on the reports.

"Although TSMC did not confirm the price hike, it seemed many investors were encouraged by the news," Su said. "If the 10-20 percent price hike is true, it will significantly boost TSMC's bottom line."

But Su cautioned that TSMC shares could face stiff technical resistance ahead of NT$590.00 after Wednesday's rally.

TSMC's buying spread to other semiconductor stocks.

United Microelectronics Crop., a smaller contract chipmaker, rose 2.74 percent to end at NT$60.00, and integrated circuit packaging and testing services provider ASE Technology Holding Co. gained 2.08 percent to close at NT$122.50.

Memory chip supplier Nanya Technology Corp. closed 1.52 percent higher at NT$67.00.

Also in the electronics sector, power management solutions provider Delta Electronics Inc. rose 3.54 percent to close at NT$277.50, while iPhone assembler Hon Hai Precision Industry Co. lost 0.46 percent to end at NT$108.50.

"Judging from the movement of these large cap stocks, I think foreign institutional investors were behind today's buying," Su said. According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$16.74 billion in shares on the market Wednesday.

"Shipping heavyweights continued to attract buying. Because they generated large turnover, their gains also served as a major driver of the Taiex's gains," Su said, suspecting foreign institutional buying as freight rates continue to rise.

The transportation sector, where many major shipping stocks are traded, rose 3.44 percent.

Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 2.86 percent to close at NT$144.00, and rival Wan Hai Lines Ltd. soared 7.38 percent to end at NT$262.00.

Airlines stocks played catch-up, with China Airlines up 1.76 percent to close at NT$17.30, and EVA Airways up 1.61 percent to end at NT$18.95.

Elsewhere, food brand Uni-President Enterprises Corp. rose 0.14 percent to close at NT$70.60, while China Steel Corp., Taiwan's largest steel maker, ended unchanged at NT$36.00, and Formosa Petrochemical Corp. lost 0.42 percent to close at NT$94.60.

"The U.S. Federal Reserve's attitude toward its monetary policy remains one of the most important factors moving global markets," Lu said, suggesting that investors follow the annual symposium for global central bankers to kick off in Jackson Hole, Wyoming, on Thursday for clues on the Fed's thinking.

Source: Focus Taiwan News Channel