Taipei, Shares in Taiwan closed higher Tuesday after bargain hunters rushed to pick up stocks across the board at a time of reduced concerns over trade friction between the United States and China ahead of bilateral talks scheduled for later this week, dealers said.
Buying focused on large-cap stocks in both electronic and non-high tech sectors as select electronic stocks, including firms producing passive components such as chip resistors and multi-layer ceramic capacitors, which have been hammered recently, staged a rebound to bolster investor confidence, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 93.15 points, or 0.87 percent, at the day's high of 10,792.20, off an early low of 10,697.01, on turnover of NT$112.29 billion (US$3.66 billion).
The market opened down 2.04 points at the day's low but soon regained footing to move into positive territory, as investors took cues from a higher Wall Street, where the Dow Jones Industrial Average ended up 0.35 percent and the S&P 500 index closed up 0.24 percent overnight, the dealers said.
Momentum accelerated in the mid-morning session and became more obvious in the afternoon session, as investors left behind worries over trade friction between the U.S. and China to hunt bargains, lifting the Taiex to the highest level for Tuesday, when the China market posted solid gains, they said.
U.S. Treasury Under Secretary David Malpass is slated to meet with his Chinese counterpart Wang Shouwen (???) in Washington this week, a meeting the market perceives as a chance for both sides to reduce differences in the trade issue, the dealers said.
"Equities in Shanghai and Shenzhen advanced today, which encouraged investors here to buy," Mega International Investment Services Corp. analyst Alex Huang said. "It seems that investors have hopes that negotiations between China and the U.S. could be a positive sign."
Buying was seen among passive component stocks, helping them come out of recent doldrums, with Yageo Corp. up 1.66 percent to close at NT$673.00, and Walsin Technology Corp. Up 1.44 percent to end at NT$282.50. "These passive component stocks have served as an indicator about whether local investors are willing to buy," Huang said.
Also in the electronics sector, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 0.63 percent to close at NT$241.00, and United Microelectronics Corp., a smaller rival of TSMC, gained 2.56 percent to end at NT$18.00.
Largan Precision Co., a smartphone camera lens supplier to Apple Inc., grew 2.40 percent to close at NT$4,700.00, and memory chipmaker Nanya Technology Corp. rose 4.26 percent to end at NT$68.50.
Huang said buying was seen among old economy and financial stocks to push the broader market further higher.
Among the gaining non-high tech stocks, Formosa Chemicals & Fibre Corp. rose 1.28 percent to close at NT$119.00, textile firm Far Eastern New Century Corp. added 4.77 percent to end at NT$34.05, food brand Uni-President Enterprises Corp. grew 1.06 percent to close at NT$76.20, and Mega Financial Holding Co. rose 1.37 percent to end at NT$25.85.
"Despite the gains in index, turnover remained thin, so I am worried it is not easy for the Taiex to jump over the nearest technical hurdles at around 10,900 points any time soon," Huang said.
According to the TWSE, foreign institutional investors bought a net NT$6.13 billion-worth of shares on the main board Tuesday.
Source: Focus Taiwan News Channel