Taipei: Shares in Taiwan rebounded on Wednesday, following a downturn in the previous session, driven by a rally in the United States overnight after the release of slower-than-expected June inflation data, according to market dealers.
According to Focus Taiwan, the Taiex, which is the benchmark index for the Taiwan Stock Exchange, rose by 893.64 points, or 2.00 percent, closing at 45,631.59. The index fluctuated between 44,850.69 and 45,881.91 throughout the day. The total turnover amounted to NT$984.08 billion (approximately US$30.61 billion), showing a decrease from the average of NT$1.06 trillion observed over the previous five sessions.
"Market sentiment improved as U.S. inflation eased in June, so local tech stocks simply followed their American counterparts to move higher," stated Kevin Su, an analyst at Hua Nan Securities. The Philadelphia Semiconductor Index experienced a gain of 2.54 percent, while the tech-heavy Nasdaq index increased by 0.90 percent on Tuesday, following a year-on-year growth of 3.5 percent in the June Consumer Price Index (CPI), which was slower than the anticipated 3.8 percent.
Su also noted that investors remained optimistic about AI development, as major cloud service providers continued to invest in AI infrastructure. Within the electronics sector, there was a 1.98 percent increase, with IC packaging and testing service firm ASE Technology Holding Co. climbing by 6.55 percent to close at NT$683.00, and smartphone IC designer MediaTek Inc. rising by 2.19 percent to end at NT$3,740.00.
Memory chip supplier Winbond Electronics Corp. experienced a 10 percent surge, reaching the maximum daily increase, to close at NT$180.500, while rival Nanya Technology Corp. saw a 7.37 percent rise to end at NT$481.00. Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which constitutes over 40 percent of the total market value, gained 0.83 percent to close at NT$2,440.00, although its consolidation limited the Taiex's overall upturn and restricted turnover.
"Many investors stayed on the sidelines, waiting for TSMC's second-quarter results and third-quarter guidance, due Thursday," added Su.
In the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose by 1.49 percent, ending at NT$239.00. Driven by rising product prices, printed circuit board maker Compeq Manufacturing Co. surged by 10 percent to close at NT$218.00, while Yageo Corp., the world's third-largest multi-layer ceramic capacitor supplier, gained 2.57 percent to finish at NT$798.00.
Non-tech stocks also saw buying interest, aligning with the broader market trend. "Petrochemical stocks continued to move higher, led by the four major entities of the conglomerate Formosa Plastics Corp.," Su explained. Nan Ya Plastics Corp. soared by 8.33 percent to close at NT$227.50, and Formosa Plastics Corp. increased by 3.30 percent to NT$65.70. Formosa Petrochemical Corp. surged by 10 percent to close at NT$72.80, and Formosa Chemicals and Fibre Corp. ended up 5.67 percent at NT$70.80.
Additionally, COVID-19 and flu test kit provider Panion and BF Biotech Inc. rose by 1.97 percent to close at NT$62.00, while ScinoPharm Taiwan, Ltd. added 4.77 percent to end at NT$20.85.
"The U.S. June producer price index, due later Wednesday, is worth watching for more clues about inflation," remarked Su. Meanwhile, the Taiwan Stock Exchange reported that foreign institutional investors sold a net NT$1.42 billion of shares on the main board Wednesday.