Shares in Taiwan moved higher to close above the 17,400-point mark Monday as interest was ignited by the all-time highs posted by the major indexes in the United States markets at the end of last week, dealers said.
Select large-cap tech stocks, in particular in the semiconductor industry, attracted buying in the wake of the gains posted by their counterparts in the U.S., the dealers said.
In the meantime, rotational buying pushed up old economy industries such as shipping and petrochemical stocks, giving another boost to the broader market, they added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 118.40 points, or 0.68 percent, at the day’s high of 17,415.30 after coming off a low of 17,279.46. Turnover totaled NT$373.65 billion (US$13.41 billion).
The market opened up 0.15 percent on follow-through buying from a session earlier, when the Taiex rose 1.28 percent, and soon fell to negative territory in the early morning session on profit-taking, dealers said.
But, buying reemerged in the bellwether electronics sector as investors hunted for bargains among large semiconductor stocks, in particular in the late trading session, in the wake of a 1.10-percent surge posted by the Philadelphia Semiconductor Index on Friday.
And along with the upturn enjoyed by the old economy sector, the Taiex returned to positive territory by the end of the session, dealers said.
The electronics sector rose 0.36 percent to close at 830.81, off a low of 824.59, with the semiconductor sub-index ending up 0.70 percent.
“Judging from today’s movement, buying moved back to tech heavyweights from their second- and third-tier counterparts, and the semiconductor industry served as one of the pillars for the gains on the broader market,” Concord Securities analyst Kerry Huang said.
With funds exiting from smaller stocks, the index in the over-the-counter market underperformed the Taiex, falling 0.50 percent to 214.81.
Among the semiconductor stocks that saw gains, United Microelectronics Corp., a smaller contract chipmaker rival of Taiwan Semiconductor Manufacturing Co. (TSMC), rose 3.48 percent to close at the day’s high of NT$62.50.
Integrated circuit designer MediaTek Inc. increased 4.26 percent to end at the day’s high of NT$980.00, and IC packaging and testing services provider ASE Technology Holding Co. surged 5.82 percent to close at NT$105.50.
TSMC, the most heavily weighted stock in the local market, however, rose only 0.33 percent to end at NT$602.00.
“Turnover remained moderate and was not large enough to help TSMC make a breakthrough,” Huang said. “The stock needs turnover of more than NT$400 billion to have a takeoff.”
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 1.38 percent to close at NT$107.50 after the company reported a year-on-year decline of 10.07 percent in sales for October.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 2.24 percent to end at NT$2,050.00 after its October revenue hit a nine-month high.
“In addition to the tech sector, buying in the shipping industry continued as investors simply took advantage of recent tumbles,” Huang said.
The transportation sector, where many shipping stocks are traded, surged 7.10 percent after Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 8.77 percent to close at NT$124.00. The company has reported a quarterly high net profit of NT$80.14 billion for the third quarter of this year.
Evergreen’s rivals also saw solid growth with Yang Ming Marine Transport Corp. up 10 percent, the maximum daily increase, to close at NT$118.00, and Wan Hai Lines Ltd. up 6.74 percent to end at NT$190.00.
“The three shipping stocks took the top three spots in terms of turnover today, indicating enthusiasm toward them had returned,” Huang said.
Also in the transportation sector, China Airlines rose 7.42 percent to close at NT$21.00, and EVA Airways gained 8.80 percent to end at NT$23.50.
Elsewhere in the old economy sector, stocks in the petrochemical and textile industry moved higher in the wake of a 1.1-percent increase in international crude prices overnight.
Among them, Formosa Plastics Corp. rose by 2.80 percent to close at NT$11.00, Eclat Textile Co. gained 2.48 percent to end at NT$62.00, and Shinkong Synthetic Fibers Corp. increased by 1.03 percent to close at NT$19.60.
“After today’s gains in the Taiex, the main board has become technically healthier, and even if there’s any pullback, I think the index will see strong technical support at around 17,250 points,” Huang said.
According to the TWSE, foreign institutional investors bought a net NT$6.75 billion worth of shares on the main board Monday.
Source: Focus Taiwan News Channel