Taipei--Shares in Taiwan closed above the 10,300-point level on Tuesday on a strong showing by the bellwether electronics sector, which got a boost from a rebound in tech stocks in the United States overnight, dealers said.
Buying focused on contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC,???) and iPhone assembler Hon Hai Precision Industry Co. (??), the two companies with the highest market capitalization on Taiwan's market, they said.
The weighted index on the Taiwan Stock Exchange closed up 73.86 points, or 0.72 percent, at 10,324.46, after moving between 10,286.79 and 10,354.37, on turnover of NT$92.55 billion (US$3.04 billion).
The market opened up 0.35 percent in reaction to the Nasdaq's 1.42 percent gain and the Philadelphia Semiconductor Index's 1.94 percent gain overnight, dealers said.
Buying in the large-cap electronics stocks then accelerated to push the weighted index above 10,300 points, they said.
"TSMC and Hon Hai dominated Tuesday's trading session, helping the electronics sector account for about 70 percent of total turnover," Mega International Investment Services Corp. analyst Alex Huang said.
"The two stocks benefited from high expectations for the launch of the next generation iPhones by Apple Inc. (expected in September), and buying even spread to other Apple concept stocks," Huang said.
TSMC is believed to be the supplier of the A11 processor for the new iPhone production, while Hon Hai is said to be the only assembler of the new 5.8-inch iPhone.
TSMC gained 1.64 percent to close at NT$216.50, with 28.63 million shares changing hands, after hitting an early high of NT$218.00.
The intraday high pushed up its market cap to NT$5.65 trillion, the highest ever for any stock listed in Taiwan.
Hon Hai rose 4.57 percent to end at NT$114.50 on trading volume of 90.18 million shares, with its market cap surpassing NT$1.98 trillion.
Among other suppliers to Apple, Pegatron Corp. (??), an assembler of smaller iPhones, rose 3.68 percent to close at NT$98.50, while smartphone camera maker Largan Precision Co. (???) gained 0.21 percent to end at NT$4,845.00.
"Since the electronics sector absorbed the majority of funds in the market today, old economy stocks generally moved within a narrow range," Huang said. "The financial sector moved higher because of their relatively low valuations."
Among old economy stocks, China Steel Corp. (??) , the largest steel maker in Taiwan, fell 0.41 percent to close at NT$24.10, and Nan Ya Plastics Corp. (??) lost 0.14 percent to end at NT$72.20, while Formosa Plastics Corp. (??) gained 0.33 percent to close at NT$91.00.
In the financial sector, which ended up 0.49 percent, Cathay Financial Holding Co. (???) gained 1.24 percent to close at NT$49.00, and Fubon Financial Holding Co. (???) rose 1.39 percent to end at NT$47.45.
"After the weighted index rose above the 10,300 point mark, the market seemed to be a little bit overheated," Huang said. "Technically speaking, the market could enter consolidation mode in the near term."
Source: Focus Taiwan News Channel