Shares in Taiwan staged a rebound Tuesday after slumping a session earlier on buying ignited by a rally on markets in the United States overnight, dealers said.
Though stocks rose, turnover remained thin as investors were anticipating the release of U.S. inflation data for January later Tuesday to get a sense of whether the U.S. Federal Reserve will feel the need to further raise interest rates, dealers said.
The Taiex, the Taiwan Stock Exchange’s weighted index, ended up 110.20 points, or 0.71 percent, at 15,654.48 after moving between 15,584.74 and 15,669.63. Turnover totaled NT$177.66 billion (US$5.88 billion).
The market opened up 0.26 percent, and momentum accelerated as investors reacted to a 1.11 percent rise in the Dow Jones Industrial Average and a 1.48 percent rise in the tech-heavy Nasdaq index overnight, dealers said.
While the bellwether electronics sector continued to push share prices higher, buying was also seen in financial and old economy stocks to give the broader market additional support and help the Taiex clear technical resistance near 15,600 points, dealers said.
“The U.S. markets, again, drove other markets around the world, including the Taipei market,” Mega International Investment Services Corp. analyst Alex Huang said.
“The gains in the U.S. showed optimism over the consumer price index data due out later in the day, but many investors preferred to wait for the actual CPI numbers, so it was not a surprise that turnover stayed low,” Huang said.
Huang said the electronics sector and semiconductor sub-index both rose 0.72 percent Tuesday, pushing the Taiex higher, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) rose 0.74 percent to close at NT$545.00.
“But today’s buying appeared balanced in the tech sector because TSMC did not attract most of the market’s attention as it had in recent sessions,” Huang said.
“Many other smaller semiconductor stocks had bigger gains in percentage terms than TSMC,” Huang said, pointing to high technical hurdles for TSMC ahead of NT$550.00.
Among other semiconductor stocks, contract chipmakers United Microelectronics Corp. (UMC) gained 1.31 percent to end at NT$50.40 and Powerchip Semiconductor Manufacturing Corp. closed 1.36 percent higher at NT$33.60.
Dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. closed up 1.39 percent at NT$58.40, and Global Unichip Corp., TSMC’s application-specific integrated circuit (ASIC) subsidiary, gained 1.45 percent to close at NT$911.00.
Also, Novatek Microelectronics Corp., UMC’s display IC design unit, rose 4.73 percent to end at NT$398.00, while Alchip Technologies Ltd., another ASIC designer, bucked the uptrend, falling 4.90 percent to end at NT$912.00.
Elsewhere in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. added 0.99 percent to close at NT$102.00, and flat panel makers AUO Corp. and Innolux Corp. rose 3.63 percent and 3.20 percent, respectively, to end at NT$17.15 and NT$12.90.
“The moderate buying in TSMC also gave a chance to non-tech stocks to move higher, and today the financial sector attracted rotational interest during the session at a time of rising interest rates,” Huang said.
In the financial sector, which rose 0.60 percent, Cathay Financial Holding Co. rose 1.63 percent to close at NT$43.60, and Fubon Financial Holding Co. gained 1.01 percent to end at NT$60.10.
Mega Financial Holding Co. added 0.75 percent to close at NT$33.55, and CTBC Financial Holding Co. ended up 0.66 percent at NT$22.90.
Among old economy stocks, the transportation sector attracted bargain hunters, rising 2.21 percent, led by Evergreen Marine Corp., the largest container cargo shipper in Taiwan, which rose 3.83 percent to close at NT$149.00.
Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 2.88 percent and 1.36 percent, respectively, to end at NT$60.70 and NT$74.80.
“The buying in Evergreen Marine came amid speculation that the company is planning a cash dividend of NT$60 per share for its 2022 earnings. If that turns out to be true, the dividend yield (the dividend payout to share price ratio) is quite good,” Huang said.
The petrochemical sector rose 0.84 percent, with Formosa Plastics Corp. up 1.46 percent to close at NT$90.60, and Taita Chemical Co. up 1.34 percent to end at NT$22.70.
“In addition to the U.S. inflation data, the settlement of February futures contracts could affect the spot market tomorrow,” Huang said.
“The bright spot is that foreign institutional investors still held about 12,000 net long-position contracts Monday, a relatively high number, indicating they remained upbeat about the spot market.”
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$8.73 billion in shares on the market Tuesday.
Source: Focus Taiwan News Channel