Shares in Taiwan closed slightly higher Friday after an early fall that was triggered by weakness in markets in the United States overnight, dealers said.
The market recovered with the help of government-led funds and their support for financial stocks and some tech heavyweights, especially late in the trading session, dealers said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 40.11 points, or 0.31 percent, at 13,026.71, after moving between 12,868.25 and 13,029.94. Turnover totaled NT$175.32 billion (US$5.44 billion).
The market opened down 0.35 percent and hit the day’s low within 30 minutes in reaction to a 0.46 fall in the Dow Jones Industrial Average and a 1.73 drop in the tech-heavy Nasdaq index Thursday amid worries over the U.S. Federal Reserve’s latest rate hike, dealers said.
With the Taiex falling below 12,900 points, however, buying emerged to push up the financial sector and give large tech stocks a boost, propelling the index back over the 20-day moving average of 12,985, dealers said.
“Judging from today’s movement of the financial sector, I suspect government-led funds picked up select financial stocks in which the government has a stake,” Hua Nan Securities analyst Kevin Su said.
“Given the global volatility due to the Fed’s large rate hike, the buying was aimed at bolstering market confidence.”
On Wednesday, the Fed raised its key interest rates by 75 basis points after pushing through previous increases totaling 300 basis points since March to combat inflation.
Fed Chairman Jerome Powell also said it was “premature” to think about a pause on rate increases, suggesting “the ultimate level of interest rates will be higher than previously expected.”
“It seemed that government-led funds wanted to push the Taiex over 13,000 points for the time being by helping it overcome technical hurdles around the 20-day moving average,” Su said.
The financial sector, which remained above the previous closing level for most of the session, ended up 0.95 percent.
Mega Financial Holding Co. ended 1.55 percent higher at NT$29.55, First Financial Holding Co. finished up 1.63 percent at NT$24.95, and Hua Nan Financial Holding Co. closed 2.16 percent higher at NT$21.30. The three are government-invested financial institutions.
In addition, CTBC Financial Holding Co. rose 1.70 percent to end at NT$20.90, and Cathay Financial Holding Co. added 0.26 percent to close at NT$38.95, while Fubon Financial Holding Co. lost 0.39 percent to end at NT$51.50.
“I also suspect some tech heavyweights benefited from government buying. ASE was one of them after recent falls in its stock price caused by rising U.S. Treasury yields,” Su said.
ASE Technology Holding Co., the world’s largest IC packaging and testing services provider, rose 1.26 percent to close at NT$80.50. Before the market close, the company unveiled advanced packaging solutions for chiplets used in artificial intelligence and automotive electronics.
Among other semiconductor stocks, application-specific integrated circuit designer Alchip Technologies Ltd. rose 3.42 percent to end at NT$725.00, and power management IC designer Silergy Corp. gained 3.52 percent to close at NT$397.50.
Bucking the upturn, contract chipmaker Taiwan Semiconductor Manufacturing Co. lost 0.52 percent to end at NT$382.00, off a low of NT$378.50, and smartphone IC designer MediaTek Inc. fell 0.50 percent to close at NT$597.00, off a low of NT$586.00.
Also in the electronics sector, which rose 0.02 percent, iPhone assembler Hon Hai Precision Industry Co. lost 0.50 percent to end at NT$100.50 after the company announced it was setting up an electric vehicle joint venture with a Saudi Arabian sovereign wealth fund.
Power management solutions provider Delta Electronics Inc. rose 0.94 percent to close at NT$269.50.
Old economy stocks appeared mixed in the wake of U.S. volatility caused by rate hikes, dealers said.
Nan Ya Plastics Corp. lost 1.16 percent to end at NT$67.90, while Formosa Plastics Corp. added 0.12 percent to close at NT$82.90.
In addition, China Steel Corp., the largest steel supplier in Taiwan, lost 0.37 percent to end at NT$26.75, while textile brand Far Eastern New Century Corp. rose 0.15 percent to close at NT$323.50.
The transportation sector outperformed the broader market, rising 3.02 percent. EVA Airways soared 7.07 percent to end at NT$25.00, and rival China Airlines surged 5.67 percent to close at NT$17.70 on hopes that eased border controls will significantly boost their operations.
“Washington will release October job data later today, which will offer a hint at what the Fed will do next,” Su said. “If the job data comes out solid, fears over the prospects of further rate hikes could rise, hurting financial markets.”
Despite the gains in the Taiex, foreign institutional investors sold a net NT$8.78 billion in shares on the market Friday, according to the Taiwan Stock Exchange.
Source: Focus Taiwan News Channel