Taipei, Oct. 31 (CNA) Shares in Taiwan rallied Wednesday to end above 9,800 points as investors took hints from a strong performance by U.S. markets overnight, dealers said.
In the wake of gaining tech stocks in the U.S. market, the local bellwether electronics sector moved ahead, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while buying also spread to the old economy and financial sectors to push up the broader market by the end of the session, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, closed up 276.02 points, or 2.90 percent, at the day's high of 9,802.13, off an earlier low of 9,588.86, on turnover of NT$128.72 billion (US$4.16 billion).
The market opened up 0.66 percent in a knee-jerk reaction to the strong gains posted by the U.S. markets, where the Dow Jones Industrial Average closed up more than 430 points, or 1.77 percent, and the tech-heavy Nasdaq index ended up 1.58 percent Tuesday, the dealers said.
Amid eased fears over trade friction between the United States and China after U.S. President Donald Trump said he expects Washington and Beijing to reach a "great deal" to resolve their trade dispute, buying on the main board continued, with the bellwether electronics sector the focus, they said.
Momentum accelerated, in particular in the late trading session, to boost many large-cap stocks not only in the tech sector but also in the old economy and financial sectors to vault the Taiex past 9,800 points and close at the day's high, the dealers said.
"After falling sharply in recent sessions on the local main board, investors simply seized on a high-flying Dow to pick up bargains today," Concord Securities analyst Kerry Huang said.
Before Wednesday's gains, the Taiex had fallen 13.45 percent so far this month on large foreign institutional investor selling in reflection of a stronger U.S. dollar caused by a rate hike cycle in the U.S. market as well as the Washington-Beijing trade tension.
"Following the recent sell-off, many institutional investors have already kept high cash positions, and the big gains in the U.S. markets provided them with a good chance to buy," Huang said. "However, they bought just for trading purchases, since few can be sure whether the trade issue will be resolved," Huang said.
After witnessing the Philadelphia Semiconductor Index soaring 4.16 percent overnight, TSMC, the most heavily weighted stock in the local market, attracted strong buying, up 4.93 percent to close at the day's high of NT$234.00 with 57.25 million shares changing hands.
TSMC's gains boosted the Taiex by about 110 points and lifted the electronics sector and the semiconductor sub-index by 3.98 percent and 5.01 percent, respectively.
Other semiconductor firms also rode the wave of bargain hunting, with integrated circuit designer MediaTek Inc. up 10 percent, the maximum daily increase, to close at NT$227.50, and IC packaging and testing firm ASE Technology Holding Co. up 1.79 percent to end at NT$62.40.
Among the gaining Apple concept stocks, which were boosted by the launch of the new iPad Pro and Macbook Tuesday, smartphone lens supplier Largan Precision Co. rose 5.85 percent to close at NT$3,350.00, and iPhone assembler Hon Hai Precision Industry Co. added 3.14 percent to end at NT$78.80.
In the non-tech sector, Asia Cement Corp. gained 3.31 percent to close at NT$32.75, and Formosa Petrochemical Corp. added 2.95 percent to end at NT$122.00, while CTBC Financial Holding Co. rose 3.51 percent to close at NT$20.65 and E. Sun Financial Holding Co. grew 3.27 percent to end at NT$20.50.
Huang said that despite the strong showing, turnover was capped, since many investors appeared reluctant to chase prices for the moment amid concerns over the business outlook of the tech sector, a driver of Taiwan's exports, under unfavorable global trade conditions.
According to the TWSE, foreign institutional investors bought a net NT$9.04 billion-worth of shares on the main board Wednesday.
Source: Focus Taiwan News Channel