Taiwan shares close up, led by electronics giants

Taipei--Shares in Taiwan staged a technical rebound Monday from doldrums seen a week earlier, as buying emerged to boost select large-cap stocks in the electronics sector, dealers said.

However, turnover was reduced amid lingering caution over a possible interest rate hike by the U.S. Federal Reserve, which has scheduled a policymaking meeting for March 14-15, the dealers said.

The weighted index on the Taiwan Stock Exchange closed up 69.45 points, or 0.72 percent, at the day's high of 9,697.34, off an early low of 9,656.56, on turnover of NT$79.42 billion (US$2.56 billion).

The market opened up 0.30 percent as buying was sparked by a higher Wall Street, where the Dow Jones Industrial Average gained 0.21 percent and the S&P 500 index rose 0.33 percent on Friday on the back of a solid February job report, the dealers said.

Buying accelerated as investors rushed to pick up heavyweights in the electronics sector, such as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and smartphone camera lens supplier Largan Precision Co. (???), while the financial sector also posted gains to push the broader market even higher at the close, they said.

"Today's gains were simply technical in nature after a slowdown in recent weeks," Taishin Securities Investment Advisory analyst Tony Huang said. "Judging from the thin turnover, the local main board remained in consolidation mode amid fears over a possible rate hike by the Fed."

Huang said that the market widely expects that the U.S. central bank will raise its key interest rates later this week after Washington released a better-than-expected non-farm payroll report on March 10.

In February, the U.S. market created 235,000 new jobs, beating an earlier market estimate of a 190,000 job increase, and the jobless rate fell to 4.7 percent from 4.8 percent seen in January.

"After the February job report, the chances of the Fed tightening its monetary policy have topped 90 percent. Now, the question is how many times the Fed will raise interest rates this year," Huang said. "We have to pay close attention to the comments made by the Fed after the policymaking meeting for more clues."

The electronics sector bounced back, up 0.98 percent, with the sub-index for the semiconductor sector up 1.39 percent, after TSMC, the most heavily weighted stock in the local market, rose 1.63 percent to close at NT$186.50, with 10.49 million shares changing hands.

"TSMC has been consolidating for some time, as the first quarter is a traditional slow season for the global integrated circuit industry," Huang said. "Now, bargain hunters have turned active to pick up the stock."

Largan, a smartphone camera supplier to Apple Inc., gained 3.20 percent to end at NT$4,650.00 to remain the most expensive stock in Taiwan, on hopes that the company will benefit from a possible increase in the adoption of dual-lens cameras in the next generation iPhones, which are expected to hit the market in the second half of this year.

Also in the electronics sector, IC packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) added 3.22 percent to close at NT$38.55.

The financial sector ended up 0.65 percent on expectations that an interest rate hike will boost banks' interest spread to increase the sector's bottom line.

Among the gaining financial stocks, Fubon Financial Holding Co. (???), which owns Taipei Fubon Commercial Bank (???), rose 0.77 percent to close at NT$52.30, and Cathay Financial Holding Co. (???), which operates Cathay United Bank (????), added 1.60 percent to end at NT$50.80.

"Before the Fed's meeting is wrapped up, the local main board will move in a narrow range between 9,650 and 9,750 points," Huang said.

Source: Focus Taiwan News Channel