Taipei-Shares in Taiwan extended their momentum from a session earlier to close above the 11,600-point mark Wednesday as investors were encouraged by the gains posted on U.S. markets overnight, dealers said.
Buying focused on tech heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to push the market's benchmark index, the Taiex, past technical resistance ahead of 11,600 points by the end of the session, they said.
Turnover remained thin, however. Many investors were still anxious over the trade dispute between the United States and China with a phase-one agreement yet to be signed, even as both sides sounded upbeat about a possible pact, dealers said.
The Taiex ended up 70.64 points, or 0.61 percent, at 11,647.46, after moving between 11,590.81 and 11,651.73, on turnover of NT$108.87 billion (US$3.57 billion).
The market opened up 0.12 percent in reaction to record highs posted by the Dow Jones Industrial Average, the S and P 500 index and the tech-heavy Nasdaq overnight amid rising optimism toward a Washington-Beijing trade agreement, dealers said.
The buying mood remained throughout the session, and intensified in the final half hour of trading, they said.
The upbeat mood on U.S.-China trade came after China's Ministry of Commerce said Monday in a statement that the leaders of the two countries spoke by phone and discussed resolving core issues of common concern.
"It was rare for Chinese authorities to speak about the trade issue, so the statement was encouraging to investors in global financial markets," Ta Chan Securities Investment Consulting analyst Jerry Chen said.
"Still, investors are waiting for a final agreement to be signed, so turnover today remained light, with many investors staying on the sidelines," the analyst said.
Wednesday's buying in Taiwan was largely targeted at large cap tech stocks, many of which benefited from buying late in the session.
TSMC, the most heavily weighted stock on the Taiwan Stock Exchange (TWSE), rose 1.30 percent to close at NT$311.00, with 18.42 million shares changing hands.
TSMC's gains alone contributed to a 40 point increase in the Taiex and pushed up the electronics sector and the semiconductor sub-index by 0.85 percent and 1.10 percent, respectively.
Also in the tech sector, Hon Hai Precision Industry Co., an iPhone assembler, rose 0.78 percent to close at NT$90.60, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., soared 2.14 percent to end at NT$4,530.00.
Integrated circuit designer MediaTek Inc. rose 0.60 percent to close at NT$422.50 after the company unveiled the Dimensity 1000 chip, the first 5G system-on-chip (SoC) in its Dimensity mobile SoC family, in both Taipei and Shenzhen Tuesday.
A U.S. brokerage said MediaTek's sales will see 20 percent growth in 2020 to a new high of NT$300 billion.
"Judging from the gains posted by these large electronics stocks, I think foreign institutional investors were net buyers of shares today," Chen said.
According to the TWSE, foreign institutional investors bought a net NT$2.57 billion in shares Wednesday after a net buy of NT$374 million a session earlier.
Old economy and financial stocks also moved higher in line with the broader market amid optimism over the global trade issue, Chen said.
Among the old economy stocks, Standard Foods Corp. added 2.85 percent to close at NT$68.60., Nan Ya Plastics Corp. rose 1.26 percent to close at NT$72.50, and China Steel Corp., the largest steel maker in Taiwan, gained 0.42 percent to end at NT$23.65.
In the financial sector, which closed up 0.41 percent, Yuanta Financial Holding Co. rose 1.01 percent to end at NT$20.05, Mega Financial Holding Co. closed 0.99 percent higher at NT$30.70, and Cathay Financial Holding Co. added 0.71 percent to end at NT$42.30.
How the global trade dispute evolves is expected to continue to dictate the market's movement in Taiwan in the short term, Chen said.
"Although the Taiex overcame stiff technical resistance ahead of 11,600 points, the main board will still face high technical hurdles at around 11,668, the intraday high on Nov. 6," Chen said.
Source: Focus Taiwan News Channel