Taipei--Shares in Taiwan closed higher Thursday as investors rushed to pick up contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, helping the broader market to end in positive territory, dealers said.
Turnover remained moderate as many investors stayed on the sidelines, awaiting testimony planned by the U.S. Congress related to accusations that U.S. President Donald Trump obstructed justice, as well as a policymaking meeting of the European Central Bank and the general election in the United Kingdom later in the day, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed up 15.79 points, or 0.15 percent, at 10,225.78, after moving between 10,211.00 and 10,235.70, on turnover of NT$82.91 billion (US$2.76 billion).
The market opened up 5.94 points in a knee-jerk reaction to a higher Wall Street overnight, where the Dow Jones Industrial Average closed up 0.18 percent and the S&P 500 index ended up 0.16 percent near their day's highs, the dealers said.
Buying on the local main board continued, with the weighted index moving above the previous closing level for the rest of the session on the back of the gains posted by TSMC, shareholders of which approved a proposal that day for the chip maker to issue NT$7 in cash dividend per share for 2016, the highest level in 21 years, they said.
"Thanks to TSMC, the main board managed to close higher, although the gains were limited by a downturn largely seen among old economy stocks," MasterLink Securities Tom Tang said. "Many investors were delighted by an upbeat assessment from the chip maker."
In addition to the high cash dividend payout, TSMC Chairman Morris Chang (???) told shareholders that he has faith in the company's bottom line for 2017 after it posted a record high net profit of NT$334.25 billion, up 9 percent from a year earlier.
TSMC, the world's largest pure wafer foundry operator, rose 0.71 percent to close at the day's high of NT$213.00. Led by TSMC, the bellwether electronics sector ended up 0.44 percent and the semiconductor sub-index closed up 0.61 percent.
Also in the high-tech sector, Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., added 0.21 percent to end at NT$4,775.00, to remain the most expensive stock in Taiwan, while flat panel maker AU Optronics Corp. (??) fell 1.20 percent to close at NT$12.40 as investors locked in their earlier gains.
Tang said that the losses suffered by the old economy sector prevented the weighted index from gaining further Thursday, as the electronics sector still attracted most of the buying during the session.
Among the falling old economy stocks, food brand Uni-President Enterprises Corp. (??) fell 1.99 percent to close at NT$59.20, thanks to profit-taking, and Formosa Plastics Corp. (??) shed 1.54 percent to end at NT$89.30 on a plunge in international crude oil prices overnight.
"Foreign institutional investors have dictated the performance of the local equity market for a long time, so any external factors have been amplified for the moment," Tang said. "Before the results of the testimony on Capitol Hill, the ECB meeting and the U.K. vote come out, it was no surprise that foreign institutional investors preferred not to take obvious action now."
According to the TWSE, foreign institutional investors bought a net NT$2.34 billion-worth of shares on the main board.
Source: Focus Taiwan News Channel