Shares in Taiwan extended momentum from a session earlier, rising more than 100 points to close above 17,200 points Friday, as buying rotated to non-tech stocks with the financial sector in focus, dealers said.
However, turnover shrank as many investors stayed on the sidelines, waiting for a speech scheduled by U.S. Federal Reserve Chair Jerome Powell later in the day at the online central banker symposium in Jackson Hole, Wyoming, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 142.97 points, or 0.84 percent, at 17,209.93, after moving between 17,000.26 and 17,229.89. Turnover totaled NT$314.87 billion (US$11.28 billion). Thursday’s turnover stood at NT$377.16 billion.
The market opened down 5.85 points and moved into negative territory in the early morning session in the wake of the losses incurred on U.S. markets, where the Dow Jones Industrial Average fell 0.5 percent overnight as Kansas City Fed President Esther George said it is time for the central bank to start to scale down asset purchases, dealers said.
However, the Taiex soon regained its footing as financial and select old economy stocks attracted rotational buying, while contract chipmaker Taiwan Semiconductor Manufacturing Co. kept moving higher on the back of a product price hike to boost the main board further, dealers added.
It was the first time the Taiex closed above 17,200 points since Aug. 12, when it ended at 17,219.94. In the week, the Taiex rose 867.99 points or 5.31 percent.
“Rotational buying helped the broader market offset the impact resulting from U.S. markets,” Concord Securities analyst Kerry Huang said. “Today, the financial sector, a market laggard, became a focus of such buying.”
“With interest rates moving higher at a time of a global economic recovery, financial institutions are expected to benefit from higher returns from their overseas investments,” Huang said.
In the financial sector, which rose 2.09 percent, Cathay Financial Holding Co. rose 3.04 percent to close at NT$57.70, Fubon Financial Holding Co. gained 2.71 percent to end at NT$83.50, Mega Financial Holding Co. added 1.75 percent to close at NT$32.00, and CTBC Financial Holding Co. grew 1.56 percent to end at NT$22.75.
Rotational buying was also active among many old economy stocks, in particular in the petrochemical sector, which rose 1.85 percent on an increase in crude oil prices as a storm approached the Gulf of Mexico.
Among the gaining petrochemical stocks, Formosa Plastics Corp. rose 1.62 percent to close at NT$100.50, and Nan Ya Plastics Corp. gained 2.01 percent to end at NT$86.30.
Elsewhere in the old economy sector, shares in China Steel Corp., Taiwan’s largest steel maker, rose 1.51 percent to close at NT$36.90, and Ta Chen Stainless Pipe Co. added 2.45 percent to end at NT$50.20.
Bucking the upturn, shipping stocks moved lower as financial regulators stepped up their monitoring of day trading, a practice in which investors buy and then sell the same stock or sell and then buy the same stock in one single session. Investors who are keen on day trading favor the shipping industry.
Among the falling shipping stocks, Evergreen Marine Corp., the largest container shipper in Taiwan, fell 1.05 percent to close at NT$141.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines lost 2.14 percent and 2.33 percent, respectively, to end at NT$137.00, and NT252.00.
“TSMC continued to serve as a driver to the gains enjoyed by the main board,” Huang said. “Many investors were encouraged by market speculation that the chipmaker has raised product prices due to a global supply shortage,” Huang said. TSMC declined to comment on the price hike.
TSMC, the most heavily weighted stock on the local market, rose 0.84 percent to close at NT$599.00, but came off a high of NT$600.00.
TSMC’s buying was also reflected among other semiconductor stocks with integrated circuit packaging and testing services provider ASE Technology Holding Co. up 2.83 percent to end at NT$127.00, and IC designer MediaTek Inc. up 0.90 percent to close at NT$869.00.
“Turnover was reduced amid caution ahead of Powell’s speech which will be scoured for more clues about the Fed’s tightening of monetary policy,” Huang said. “So, large cap stocks like TSMC posted limited gains today.”
According to the TWSE, foreign institutional investors bought a net NT$18.23 billion worth of shares on the main board Friday.
Source: Focus Taiwan News Channel