Shares in Taiwan bounced back on Wednesday from a slump in the previous session as buying was sparked by a rally on the U.S. markets overnight in the wake of a fall in the U.S. benchmark 10-year treasury yield, dealers said.
Bargain hunters rushed to pick up large-cap tech stocks, in particular in the semiconductor industry, which served as an anchor for the upturn, while buying also extended to select old economy stocks in the tourism and auto industries to lend additional support to the broader market, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 157.63 points, or 0.95 percent, at 16,670.51, after moving between 16,538.67 and 16,702.99. Turnover totaled NT$208.993 billion (US$7.08 billion).
The market opened up 0.16 percent on a mild technical rebound after Tuesday’s 0.56-percent decline, and buying accelerated as investors took cues from a rally on the U.S. markets, where the Dow Jones Industrial Average rose by 0.8 percent and the tech-heavy Nasdaq index increased by 0.94 percent, dealers said.
On the back of a strong performance from contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the electronics sector led the broader market in moving higher for the rest of the session, dealers added.
But, turnover remained thin as caution prompted many investors to stay on the sidelines ahead of an upcoming policy-making meeting scheduled by the U.S. Federal Reserve for next week, dealers said.
TSMC holds AGM Wednesday
“Thanks to TSMC, the Taiex climbed out of yesterday’s doldrums,” Mega International Investment Services Corp. analyst Alex Huang said. “Many investors saw the U.S. market gains as a reason to hunt for bargains here, and TSMC was their largest target.”
TSMC, the most heavily weighted stock in the local market, rose by 1.68 percent to close at NT$544.00. The stock’s gains contributed almost 80 points to the Taiex’s increase and helped the electronics sector and the semiconductor industry rise by 1.21 percent and 1.65 percent, respectively.
The world’s largest contract chipmaker held an annual general meeting Wednesday morning and company chairman Mark Liu (???) told shareholders that TSMC was expected to see sales rising by 30 percent in 2022 as the manufacturer had entered a high-growth stage. TSMC’s gains boosted its market capitalization to NT$14.1 trillion, up NT$233.3 billion from a session earlier.
Other semiconductor stocks also attracted bargain hunting with smartphone IC designer MediaTek Inc. soaring by 4.49 percent to end at NT$930.00, application-specific IC (ASIC) designer Alchip Technologies Ltd. rising by 1.59 percent to close at NT$864.00, and United Microelectronics Corp., a smaller contract chipmaker, growing by 0.70 percent to end at NT$52.40.
Apple suppliers
Also in the electronics sector, some “Apple concept stocks” staged a rebound in line with the Taiex. Among them, iPhone assembler Hon Hai Precision Industry Co. rose by 0.44 percent to close at NT$114.00.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose by 0.85 percent to end at NT$1,785.00 after Adam Lin (???), company CEO, told shareholders Wednesday morning that Largan will have a better second half of this year than the first as it will soon benefit from peak season effects.
“The buying of these large-cap tech stocks reflected eased fears over a more hawkish Fed as a fall in the 10-year U.S. treasury yield has raised expectations that inflation in the American market has peaked,” Huang said.
Tourism, auto, shipping
Outside the tech sector, Huang said strong buying was seen among tourism stocks, which rose by 0.90 percent, due to hopes that the government will ease border controls in the near future to boost the tourism sector.
In the sector, Chateau International Development Co. rose by 6.62 percent to close at NT$34.65, First Hotel Co. went up by 2.14 percent to end at NT$14.35, and Leofoo Development Co., which runs a hotel chain, increased by 1.91 percent to close at NT$18.70. In addition, Lion Travel Service Co. rose by 0.97 percent to end at NT$104.50.
Buying also spread to the auto industry, which increased by 1.22 percent, with Yulon Nissan Motor Corp. up 3.44 percent to close at NT$240.50, Hotai Motor Corp. up 1.49 percent to end at NT$613.00, and China Motor Corp. up 1.28 percent to close at NT$63.20. Meanwhile, auto parts supplier Mobiletron Electronics Co. also rose by 1.37 percent to end at NT$66.80.
Elsewhere in the old economy sector, container cargo shipper Yang Ming Marine Transport Corp. rose by 2.36 percent to close at NT$130, and rival Wan Hai Lines Ltd. increased by 1.57 percent to end at NT$161.50.
Financials
In the financial sector, which rose by 0.36 percent, Fubon Financial Holding Co. rose by 0.63 percent to close at NT$63.60, while Cathay Financial Holding Co. ended unchanged at NT$54.80.
“Despite the gains today, the Taiex remained in consolidation mode as turnover failed to expand. Such quiet trading is expected to continue into next week, when the Fed wraps up its meeting on June 15,” Huang said, adding the nearest technical ceiling is expected to be seen ahead of 16,800 points, the 60-day moving average.
According to the TWSE, foreign institutional investors bought a net NT$4.40 billion worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel