Taiwan shares end up as TSMC recovers from earlier losses

Shares in Taiwan moved higher Tuesday, with investors shifting to the buy side to help the main board recoup early losses and end up 0.61 percent.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 108.71 points at the day's high of 17,796.92, after coming off a low of 17,642.32. Turnover totaled NT$374.29 billion (US$13.49 billion).

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, in particular, got a boost from late-session buying to recover from its earlier losses, driving the broader market out of the earlier doldrums, according to dealers.

The market opened up 0.26 percent in a knee-jerk reaction to a rally on the U.S. markets.

The Dow Jones Industrial Average rose 1.89 percent overnight after Anthony Fauci, the chief medical advisor to U.S. President Joe Biden, said the preliminary data on the Omicron variant of COVID-19 did not suggest it causes severe illness.

However, the bellwether electronics sector faced headwinds that sent the Taiex into negative territory as investors took cues from a 0.12 percent decline suffered by the Philadelphia Semiconductor Index.

Buying in select non-tech sectors, meanwhile, remained solid.

In the late trading session, TSMC made a comeback and, along with gains posted by shipping and airline stocks, the buying boosted the Taiex by more than 100 points by the end of the session.

"Thanks to TSMC, the Taiex returned to positive territory. The world's largest contract chipmaker's fundamentals remained sound, attracting bargain hunters," Mega International Investment Services Corp. analyst Alex Huang said.

"Fauci's assessment on the Omicron virus eased concerns among many investors, triggering the late session buying, which targeted TSMC," Huang added.

TSMC rose 1.17 percent to close at NT$607.00 after coming off a low of NT$597.00.

Led by TSMC's rebound, which contributed about 60 points to the Taiex's gains, the electronics index rose 0.35 percent to end at 851.43, off a low of 843.76, with the semiconductor sub-index up 0.40 percent.

But, other semiconductor heavyweights still suffered losses, while recouping part of their earlier downturn, dealers said.

Among them, United Microelectronics Corp., a smaller contract chipmaker, lost 1.19 percent to close at NT$66.50.

Integrated circuit packaging and testing services provider ASE Technology Holding Co. dropped 1.89 percent to end at NT$104.00. But, IC designer MediaTek Inc. gained 1.84 percent to close at NT$1,065.00.

Meanwhile, Powerchip Semiconductor Manufacturing Corp., another contract chipmaker, lost 3.03 percent to end at NT$73.60 after soaring 52.10 percent on Monday, the first day of the stock's initial public offering on the main board.

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. lost 0.47 percent to close at NT$106.00, while flat-panel makers benefited from a narrower decline in product prices in December. AU Optronics Corp. rose 3.79 percent to end at NT$21.90, and rival Innolux Corp. gained 4.12 percent to close at NT$18.95.

"In addition to TSMC, old economy stocks, in particular in the transportation sector, scored gains to give an additional support to the broader market," Huang said.

The transportation sector ended up 3.54 percent with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, up 2.13 percent to close at NT$144.00 and rivals Wan Hai Lines Ltd. and Yang Ming Marine Transport Corp. up 8.22 percent and 0.80 percent, respectively, to end at NT$191.00 and NT$126.50.

Airlines stocks also moved higher to boost the transportation sector further due to reduced COVID-19 worries, dealers said. Among them, China Airlines soared 6.97 percent to close at NT$28.40, and EVA Airways surged 6.49 percent to end at NT$27.90.

As a market laggard, the financial sector gained 1.07 percent. Cathay Financial Holding Co. rose 1.17 percent to close at NT$60.70, Fubon Financial Holding Co. added 1.62 percent to end at NT$75.30, and CTBC Financial Holding Co. gained 2.16 percent to close at NT$26.00.

"Investors had better pay close attention to November sales figures which will be released by Friday," Huang said. "In addition, how foreign institutional investors will act also deserve watching as they have cut the number of long position futures position contracts, indicating their caution on the spot market."

According to the TWSE, foreign institutional investors bought a net NT$261 million worth of shares on the main board Tuesday.

Source: Focus Taiwan News Channel