Taiwan shares breach 12,000 points in morning session

Taipei-Stocks in Taiwan steamed ahead Tuesday morning, sending the benchmark index above the 12,000-point mark after U.S. markets rallied overnight amid eased trade tensions between the United States and China, dealers said.

The bellwether electronics sector anchored the broader market, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and its sound fundamentals, they said.

As of 11:25 a.m., the weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex had gained 105.97 points, or 0.89 percent to 12,045.74 on turnover of NT$92 billion (US$3.05 billion).

The rally was spurred by record highs set by the Dow Jones Industrial Average and the tech-heavy Nasdaq index overnight after Washington and Beijing agreed to a phase one deal to resolve their trade disputes.

"It is a positive step for the two sides to reach such a deal, which has eased tensions in global trade. It's good for the economy," MasterLink Securities analyst Tom Tang said.

The U.S. and China announced Friday that they have reached a phase one trade deal consisting of some tariff relief, an increase in agricultural purchases by Beijing, and a structural change in intellectual property and technology issues.

"Seeing the record highs on U.S. markets overnight, investors here increased their appetite to take risks, sending the Taiex above the technical hurdles ahead of 12,000 points this morning," Tang said.

Turnover for Tuesday is expected to hit around NT$150 billion, compared with NT$144.85 billion seen Monday, indicating a greater willingness to trade, the analyst said.

The positive leads in global trade have led foreign institutional investors to continue moving funds into the region to boost regional currencies, referring to a stronger Taiwan dollar against the greenback.

"The strong liquidity is driving up equity prices as foreign institutional investors continued to pick up large cap stocks, in particular TSMC," Tang said.

After a 0.50 percent increase in its American depositary receipts overnight, TSMC, the most heavily weighted stock in the local market, had risen 1.93 percent to NT$342.50 with 18.39 million shares as of 11:25 a.m.

TSMC's gains pushed up the electronics sector by 1.21 percent.

Buying spread to other semiconductor stocks with integrated circuit designer MediaTek Inc. up 3.96 percent at NT$459.50 and dynamic random access memory chip supplier Nanya Technology Corp. up 3.74 percent at NT$85.90.

Elsewhere, Formosa Plastics Corp. had gained 1.03 percent to NT$97.80 and food brand Uni-President Enterprises Corp. had added 0.28 percent to NT$72.50, while Taiwan Cement Corp. was down 0.12 percent at NT$42.75.

In the financial sector, Fubon Financial Holding Co. had lost 0.75 percent to NT$46.25 and Cathay Financial Holding Co. had dropped 0.47 percent to NT$42.70.

"Taiwan shares have gained significantly in recent sessions and a possible technical pullback is possible for the Taiex as it tests 12,000 points," Tang said.

"But with the strong liquidity, I remain upbeat about future movements despite possible corrections," Tang said.

Source: Focus Taiwan News Channel