Taipei--Shares in Taiwan closed above the 10,000- point mark Thursday as contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) continued to lead an upturn on the broader market amid optimism toward its bottom line, dealers said.
It was the first time the local main board had closed above the 10,000-point level since April 11, 2000, when the weighted index ended at 10,068.05 points. The local equity market was largely boosted in recent sessions by foreign institutional buying, which focused on large-cap stocks like TSMC, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 33.16 points, or 0.33 percent, at 10,001.48, after moving between 9,964.30 and 10,018.79, on turnover of NT$96.36 billion (US$3.19 billion).
The market opened up 0.19 points on a mixed Wall Street, where the Dow Jones Industrial Average closed down 0.16 percent and the S&P 500 index ended up 0.11 percent overnight, and buying pushed up the weighted index to the day's high, since TSMC recouped earlier losses despite disappointing sales for April, the dealers said.
The weighted index then came off the early high, as some investors took profits before the strength of TSMC accelerated, in particular in the last few minutes, to vault the main board past the crucial level of 10,000 points by the end of the session, they said.
"Looking at the gains posted by TSMC and other high-tech heavyweights, I think that buying by foreign institutional investors again served as a driver to the broader market," Concord Securities analyst Kerry Huang said.
"Foreign institutional investors simply used these large-cap stocks as a tool to boost the spot market in a bid to profit from the futures market," where foreign investors held 59,000 more long position contracts than short position ones as of Thursday.
TSMC, the world's largest contract chip maker, rose 0.97 percent to close at NT$207.50 after moving between NT$204.50 and NT$208.50, with 43.72 million shares changing hands.
The stock opened lower in a knee-jerk reaction to its April sales report, which said that its revenue fell 33.8 percent from a month earlier and also dropped 14.9 percent from a year earlier. Despite a slow April, TSMC has left unchanged its second-quarter sales forecast of NT$213 billion-NT$216 billion. "Investors remained upbeat about TSMC's fundamentals and the move to maintain its second-quarter guidance means that the company's operations will bounce back, in particular in June, when Apple starts to build up its inventories for the next generation of iPhones," Huang said.
Among the gaining Apple concept stocks, integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) rose 2.70 percent to close at NT$38.00, and smartphone camera lens supplier Largan Precision Co. (???) gained 0.30 percent to end at NT$4,960.00.
Underperforming the broader market, Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, closed unchanged at NT$104.00.
In the old economy sector, Formosa Plastics Corp. (??) rose 0.79 percent to end at NT$88.90 after a rebound staged by international crude oil prices overnight, while food brand Uni-President Enterprises Corp. (??) added 1.05 percent to close at NT$57.50.
"Whether the main board will be sustainable above 10,000 points will depend on foreign fund inflow," Huang said. "If the Taiwan dollar continues to move up against the greenback, further fund inflows will give an additional boost to local equities," he said.
Source: Focus Taiwan News Channel