Shares in Taiwan staged a rally Tuesday, with the bellwether electronics sector continuing to steam ahead as investors ignored the losses by tech stocks in the United States overnight, dealers said.
Despite the upturn, turnover remained thin as many investors continued to worry about volatility in U.S. markets as the Federal Reserve considers more rate hikes, they said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 155.05 points, or 0.98 percent, at 16,056.09, after moving between 15,915.93 and 16,085.85. Turnover totaled NT$206.79 billion (US$6.96 billion).
Though the tech-heavy Nasdaq index shed 1.20 percent overnight, the Taiex opened up 0.09 percent, and buying accelerated, especially in semiconductor stocks, after major semiconductor suppliers reported new highs in sales for April, dealers said.
TSMC
The electronics sector rose 1.53 percent, and the semiconductor sub-index soared 1.97 percent after Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 1.92 percent to close at NT$530.00.
TSMC’s gains contributed on their own to a more than 80-point increase in the Taiex’s rise.
“Judging from the strong April sales reported by many semiconductor giants, I think they should see their momentum grow in the second quarter as buyers build up inventories to prepare for third quarter demand, a peak season for the electronics industry,” Hong Kuang Securities Consulting CEO Chang Chih-cheng said.
TSMC posted consolidated sales of NT$172.56 billion in April, up 0.3 percent from a month earlier and up 55 percent from a year earlier, leaving slow season effects behind.
Other tech stocks
Similarly good results were seen among other semiconductor heavyweights, pushing up the electronics sector as well as the broader market, Chang said.
United Microelectronics Corp., a smaller contract chipmaker, rose 1.31 percent to end at NT$50.10, smartphone IC designer MediaTek Inc. rose 1.94 percent to close at NT$841.00, and IC packaging and testing services provider ASE Technology Holding Co. closed 2.75 percent higher to end at NT$97.30.
In addition, application-specific IC designer Alchip Technologies Ltd. soared 5.68 percent to close at NT$949.00, and power management IC designer Silergy Corp. gained 3.49 percent to end at NT$2,815.00.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.48 percent to close at NT$108.00, while flat panel supplier Innolux Corp. continued a downtrend, falling 1.87 percent to end at NT$13.10 after Hon Hai decided to withdraw from the company’s board of directors.
While the electronics sector performed relatively well, the financial and old economy sectors remained in the doldrums.
Financials
The financial sector lost 0.45 percent as insurers face massive claims for COVID-19 insurance policies as Taiwan experiences a spike in domestically transmitted cases that have reached more than 60,000 a day.
Fubon Financial Holding Co. and Cathay Financial Holding Co., which own big insurance firms, lost 1.28 percent and 1.13 percent, respectively, to close at NT$61.60 and NT$52.60.
In addition, Mega Financial Holding Co. fell 1.22 percent to end at NT$30.45, while SinoPac Financial Holding Co. rose 1.19 percent to end at NT$17.05.
Shipping firms
The transportation sector also came under pressure, falling 1.90 percent after cargo shipping giants Hapag-Lloyd and Maersk were cited by news reports as saying they have become downbeat about freight rates in the second half of 2022 after a recent fall in freight rates on routes between East Asia and the western U.S.
Among container cargo shippers, Evergreen Marine Corp., the largest in Taiwan, lost 1.45 percent to close at NT$135.00, and rival Wan Hai Lines Ltd. lost 3.38 percent to end at NT$143.00.
Selling spread to bulk cargo shippers with Sincere Navigation Corp. falling 2.25 percent to close at NT$26.10 and U-Ming Marine Transport Corp. dropping 3.16 percent to end at NT$59.40.
Elsewhere in the old economy sector, Formosa Chemicals & Fibre Corp. rose 1.42 percent to close at NT$78.40, while textile supplier Far Eastern New Century Corp. ended unchanged at NT$30.90.
Short-term outlook
“As volatility on the U.S. markets continues, many foreign institutional investors preferred to stand on the sell side in Taiwan’s market,” Chang said.
“In the short term, I expect it won’t be easy for the Taiex to make a significant comeback and jump over technical hurdles ahead of 16,500 points.”
Despite the gains in the Taiex, foreign institutional investors sold a net NT$858 million in shares on the Taiwan Stock Exchange on Tuesday.
Source: Focus Taiwan News Channel