Shares in Taiwan made a significant technical comeback in the week’s first trading session Tuesday after heavy losses a week earlier triggered by Russia’s invasion of Ukraine.
Bargain hunters could be found across the board, with the electronics sector — which had been hard hit last week — in focus.
Meanwhile, buying also rotated to raw material stocks on the back of rising product prices, as well as shipping stocks due to hopes of high cash dividends, according to dealers.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 246.07 points, or 1.39 percent, at 17,898.25, after moving between 17,657.50 and 17,944.50. Turnover totaled NT$357.92 billion (US$12.78 billion).
The market opened up 5.32 points and soon gained momentum as investors shrugged off the impact of the crisis in Ukraine, picking up bargains to take advantage of beaten large-cap stocks in both the electronics and non-tech sectors.
Despite the strong technical rebound, the Taiex failed to touch the 18,000 point mark during the session as high technical hurdles remained ahead of that level.
Se1ling by foreign investors
“After aggressive selling by foreign institutional investors last week, it was no surprise that they rebuilt their positions at the beginning of a new week, leaving the Russia-Ukraine war behind — at least for now,” Mega International Investment Services Corp. analyst Alex Huang said.
“The recent losses on the global markets resulted from uncertainty surrounding the direction of the standoff between Russia and Ukraine. The commencement of war has removed that uncertainty and the conflict looks like it will be confined to the region without any direct third-party intervention,” Huang said.
Last week, foreign institutional investors sold a net NT$166.50 billion worth of shares on the main board with an emphasis placed on large tech stocks. On Tuesday, foreign institutional investors bought a net NT$6.33 billion worth of shares, according to the TWSE.
“Today, foreign institutional investors started to rebuild their positions, and the electronics sector was prioritized throughout the session. Highly priced semiconductor stocks were highlighted,” Huang said.
Tech stocks
The electronics sector closed up 1.09 percent with the semiconductor subindex up 0.84 percent.
Among the highly priced semiconductor stocks, application-specific IC (ASIC) designer Alchip Technologies Ltd closed up 6.05 percent at NT$1,140.00, power management IC designer Silergy Corp. closed up 5.91 percent to end at NT$3,855.00, and smartphone chip designer MediaTek Inc. gained 1.38 percent to close at NT$1,100.00.
In addition, United Microelectronics Corp., the second-largest contract chipmaker in Taiwan, rose 3.84 percent to end at NT$54.10, while Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest contract chipmaker, closed unchanged at NT$604.00 after coming off a high of NT$610.00.
TSMC
“Sentiment toward TSMC, the most heavily weighted stock in the local market, remained cautious amid fears that any external negative leads that emerge could push down this liquid stock. But it was nothing to do with its fundamentals,” Huang said.
Overnight, TSMC’s American depositary receipts fell for the eighth consecutive session, ending down 14 percent on the U.S. markets.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. gained 1.46 percent to end at NT$104.50, and power management solution provider Delta Electronics Inc. rose 4.06 percent to close at NT$256.50.
Stocks in other sectors
“Raw material stocks benefited from their relatively low valuations after recent consolidation,” Huang said. “Growing product prices also prompted investors to buy.”
The steel sector rose 3.87 percent with China Steel Corp., the largest steelmaker in Taiwan, up 5.42 percent to end at NT$37.95, Yieh Hsing Enterprise Co. up 4.66 percent to close at NT$20.20, and Chung Hung Steel Corp. up 3.83 percent to end at NT$42.05.
Riding the waves of growing crude prices, Formosa Plastics Corp. gained 2.86 percent to close at NT$108.00, Formosa Chemicals and Fibre Corp. rose 2.66 percent to close at NT$81.10, Nan Ya Plastics Corp. closed up 2.62 percent at NT$90.00, and Formosa Petrochemical Corp. added 2.25 percent to end at NT$100.00.
In the transportation sector, which rose 3.08 percent, Evergreen Marine Corp., Taiwan’s largest container cargo shipper, rose 4.88 percent to close at NT$150.50, while rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd, gained 4.33 percent and 3.21 percent, respectively, to end at NT$120.50 and NT$193.00.
“I expect buying in these shipping stocks will continue until they release their cash dividend policies,” Huang said.
Source: Focus Taiwan News Channel