Shares in Taiwan recovered slightly on Wednesday, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) staged a technical rebound, in the wake of a rally on the United States markets overnight, dealers said.
Bargain hunters also picked up some financial and old economy stocks, which helped to prop up the broader market, but sentiment remained cautious amid lingering concerns over a possible aggressive rate hike by the U.S. Federal Reserve, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 62.93 points, or 0.50 percent, at 12,729.05, after moving between 12,635.52 and 12,791.97. Turnover totaled NT$174.38 billion (US$5.41 billion).
The market opened up 0.3 points and moved in a narrow range in the early morning session, after a 1.48 percent drop the previous day.
After 10:30 a.m., however, buying emerged, pushing the Taiex back into positive territory until the end of the session, as investors bought into TSMC and other market heavyweights, dealers said.
The buying followed a 1.07 percent increase on the Dow Jones Industrial Average and a 2.25 percent surge on the Nasdaq index in the U.S. on Tuesday, they said.
TSMC
TSMC, the most heavily weighted stock on the local market, gained 1.35 percent to close at NT$376.00, after coming off a low of NT$370.00.
In line with newly introduced regulations, investors were barred from short-selling the stock by bidding NT$371 or lower through borrowed securities, after it fell 4.13 percent Tuesday to end at NT$371.00.
“To many bargain hunters, the stock is attractive now,” Concord Securities analyst Kerry Huang said. “But I do not rule out the possibility that government-led funds bought into TSMC and other market heavyweights today in a bid to shore up the broader market.”
TSMC’s price-earnings ratio is around 10, taking into consideration the stock’s closing level on Tuesday and its expected earnings per share of NT$37-NT$38 next year, he said.
The stock took a beating Tuesday after TSMC CEO C.C. Wei (魏哲家) sent out an internal letter to the company’s employees, encouraging them to take leave, which raised fears about slowing demand in the global semiconductor industry.
On Wednesday, however, TSMC led a 0.40 percent gain in the bellwether electronics sector, which closed at 570.68, while the semiconductor sub-index ended 0.95 percent higher.
Other tech stocks
Other semiconductor stocks appeared mixed, with smartphone IC designer MediaTek Inc. rising 2.84 percent to close at NT$579.00, and dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. gaining 0.79 percent to end at NT$54.50.
United Microelectronics Corp., a smaller contract chipmaker, shed 3.42 percent to close at NT$38.10, and IC packaging and testing services provider ASE Technology Holding Co. lost 0.52 percent to end at NT$76.90.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.48 percent to close at NT$104.00, and PC brand Asustek Computer Inc. gained 1.73 percent to end at NT$235.50.
Outside tech sector
The financial sector, meanwhile, rose 1.22 percent, also helping to drive the Taiex’s rebound, on hopes that insurance firms would have to pay less to policy holders who are in COVID-19 quarantine, as Taiwan is easing its quarantine rules, according to Huang.
Cathay Financial Holding Co. gained 2.67 percent to close at NT$38.50, and Fubon Financial Holding Co. rose 0.90 percent to end at NT$50.40. E. Sun Financial Holding Co. ended up 1.75 percent at NT$23.20, and CTBC Financial Holding Co. climbed 2.35 percent to finish at NT$20.35.
The transportation sector also helped prop up the Taiex, coming off a low to end 0.21 percent higher, as container cargo shippers recouped their earlier losses, dealers said.
Among them, Yang Ming Marine Transport Corp. rose 0.65 percent to close at NT$61.90, and Wan Hai Lines Ltd. gained 2.22 percent to end at NT$69.20, while Evergreen Marine Corp., the largest container cargo shipper in Taiwan, closed unchanged at NT$139.00, but came off a low of NT$133.50.
Elsewhere in the old economy sector, Formosa Plastics Corp. rose 0.36 percent to close at NT$82.60, and Formosa Chemicals & Fibre Corp. added 0.58 percent to end at NT$69.00. Textile brand Far Eastern New Century Corp. gained 0.79 percent to close at NT$31.90, and Eclat Textile Co. surged 4.56 percent to end at NT$424.50.
Ahead of next U.S. Fed decision
“The market is anticipating that the Fed will raise interest rates by 75 basis points in November, but it remains unclear whether it will maintain its aggressive monetary policy in December,” Huang said.
In addition, Dow futures are under pressure, after Microsoft and other tech giants on Tuesday reported disappointing earnings, he said, pointing to a fall on the spot market later in the day, which could affect the global market.
According to the TWSE, foreign institutional investors bought a net NT$2.73 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel