Taiwan stocks made a moderate comeback to close above the 18,000-point level Wednesday after a tumble one day earlier amid concerns over geopolitical tensions between Russia and Ukraine, dealers said.
The transportation sector led the rebound with buying seen across the sector, while the bellwether electronics sector came out of the previous doldrums led by select large-cap semiconductor stocks, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 86.44 points, or 0.48 percent, at 18,055.73, after moving between 17,954.75 and 18,109.28. Turnover totaled NT$268.99 billion (US$9.65 billion).
The market opened down 14.54 points at the day’s low but soon regained its footing to move above the previous closing level, and buying accelerated as investors took cues from a rebound in other regional markets such as Seoul, Hong Kong, and Shanghai, dealers said.
Return to above 18,000 points
Investors continued to ignore the latest heavy losses on the U.S. markets, as the Dow Jones Industrial Average fell 1.42 percent overnight due to the economic sanctions imposed by Washington on Russia, and pumped more funds into the transportation and electronics sectors with the Taiex breaching 18,100 points at one point before some selling emerged to cap the gains by the end of the session, dealers added.
“Judging from the performance of regional markets, including Taipei, investors were betting that tensions between Russia and Ukraine would not escalate into an all-out military conflict, although the current standstill could continue,” Mega International Investment Services Corp. analyst Alex Huang said.
U.S. President Joe Biden ordered sanctions against Russian banks and the country’s sovereign debts as he said Russia had begun “an invasion” of Ukraine after Russia sent troops into two breakaway regions in eastern Ukraine.
“Now, the ball is in Ukraine’s court but many in regional markets did not think both Russia and Ukraine want a war and returned to the buy side to pick up bargains after recent heavy losses,” Huang said. “In addition, many in the regional markets were also betting the U.S. markets will rebound later today.”
Transporation sector
The transportation sector led the rebound on the local main board, up 3.29 percent, as airline stocks surged on hopes that the Central Epidemic Command Center will allow the entry of business travelers, starting in March, and also shorten the quarantine time for all arrivals.
China Airlines soared 6.50 percent to close at NT$30.30, and EVA Airways surged 7.74 percent to end at NT$35.50.
“Buying took place across the transportation sector with air, shipping, and even land transportation stocks spotlighted throughout the session,” Huang said. The transportation sector accounted for almost 30 percent of Wednesday’s turnover.
Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 1.75 percent to close at NT$145.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. increased by 2.20 percent and 4.68 percent, respectively, to end at NT$116.00 and NT$190.00.
Bulk shippers also moved higher with U-Ming Marine Transport Corp. rising by 1.99 percent to close at NT$61.50. In addition, warehousing, inland haulage, and logistics operator Evergreen International Storage & Transport Corp. jumped 10 percent, the maximum daily increase, to end at NT$37.80.
Tech stocks
“Certain semiconductor heavyweights also attracted bargain hunters, while contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) suffered losses and underperformed the broader market,” Huang said.
TSMC, the most heavily weighted stock on the local market, fell by 0.32 percent to close at NT$625.00, although the stock came off a low of NT$623.00. After TSMC’s losses, the semiconductor sub-index rose by only 0.03 percent with the electronics sector up 0.30 percent.
“TSMC was still in consolidation mode,” Huang said, “Today’s selling saw TSMC shares test the 60-day moving average of NT$625.00 again.”
Among other semiconductor stocks which bounced back from recent losses, smartphone chip designer MediaTek Inc. rose by 0.90 percent to close at NT$1,120.00; power management IC designer Silergy Corp. increased by 1.11 percent to end at NT$3,640.00; United Microelectronics Corp., a smaller contract chipmaker, rose by 1.52 percent to close at NT$53.60; and Novatek Microelectronics Corp., which supplies drive ICs for flat panels, increased by 2.54 percent to end at NT$463.50.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose by 0.48 percent to close at NT$105.00, and electronics device distributor Synnex Technology International Corp. increased by 2.65 percent to end at NT$73.60.
In other sectors, Ta Chen Stainless Pipe Co. rose by 1.36 percent to close at NT$52.20, and Kao Hsing Chang Iron & Steel Corp. increased by 3.08 percent to end at NT$20.05. In addition, Formosa Petrochemical Corp. rose by 1.25 percent to close at NT$97.30, and Formosa Plastics Corp. increased by 0.96 percent to end at NT$105.00.
“I expect the Taiex to see stiff technical resistance ahead of 18,150 if a rebound continues,” Huang said. “Investors had better pay close attention to whether Washington will strengthen its sanctions against Russia, which might send more ripples through the financial markets.”
After the Dow’s plunge, foreign institutional investors sold a net NT$12.18 billion worth of shares on the local main board Wednesday, according to the TWSE.
Source: Focus Taiwan News Channel