Taipei--Shares in Taiwan closed higher on Thursday to remain at a 27-year high as the bellwether electronics sector continued to push up the broader market, dealers said.
Contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) led the local high tech sector as buying rotated to the stock from contract electronics maker Hon Hai Precision Industry Co. (??) after a significant uptrend in semiconductor stocks on Wall Street overnight, they said.
The weighted index on the Taiwan Stock Exchange closed up 49.34 points, or 0.48 percent, at 10,399.06, after moving between 10,368.93 and 10,403.36, on turnover of NT$95.84 billion (US$3.15 billion).
The closing level on Thursday was the highest since April 6, 1990, when the weighted index ended at 10,440.67 points.
The market opened up 0.19 percent as investors shrugged off a mixed performance on Wall Street, where the Dow Jones Industrial Average closed down 0.27 percent, focusing instead on the strong gains posted by the Philadelphia Semiconductor Index, which ended up 1.17 percent overnight, dealers said.
TSMC, the most heavily weighted stock on the local market, was a focus of the buying, leading other semiconductor and high-tech stocks higher and helping the weighted index move above its previous closing level to remain at a 27-year high, dealers said.
"As high-tech stocks in Taiwan and on Wall Street have been highly correlated, it was understandable that the local equity market kept moving up today with TSMC attracting rotational buying," Concord Securities analyst Kerry Huang said.
With many investors upbeat about TSMC's outlook with the peak season of the third quarter approaching, the stock rose 1.62 percent to close at NT$218.00, with 24.14 million shares changing hands.
Led by TSMC, the bellwether electronics sector closed up 0.53 percent and the semiconductor sub-index ended up 0.93 percent.
Among gaining semiconductor stocks, integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) added 0.94 percent to close at NT$37.75 and IC designer MediaTek Inc. (???) rose 0.56 percent to end at NT$271.00.
However, shares in Hon Hai, the second largest stock in terms of market capitalization, fell 0.44 percent to close at NT$112.50 as investors locked in earlier gains. Hon Hai's shareholders approved the proposal made at an annual general meeting held on Thursday to issue NT$4.5 in cash dividend per share on 2016 earnings per share of NT$8.6, the highest cash dividend payout in the company's history.
"Today's upturn in the broader market largely depended on the electronics sector, which accounted for more than 66 percent of total turnover on the main board," Huang said. "It seems that local institutional investors started to chase prices in the sector after buying by their foreign counterparts boosted the weighted index in recent sessions."
In the old economy sector, select stocks benefited from bargain hunting with Eclat Textile Co. (??) gaining 7.49 percent to close at NT$359.00 and shares in food brand Uni-President Enterprises Corp. (??) rose 2.20 percent to end at NT$60.50.
"It is possible for the weighted index will continue to move higher in the short term, but how far the index moves will depend on the performance of Wall Street, which could be moved by the upcoming earnings reporting season in July," Huang said.
Source: Focus Taiwan News Channel