Taipei, Shares in Taiwan staged a technical rebound from the previous session to move above the 10,000 point mark Friday as investors saw other regional markets bounce back from a major slump on Thursday, dealers said.
Futures on Wall Street moved higher, pointing to the possibility that the U.S. market could recover from the downturn seen in the past two sessions amid fears over rising interest rates, which encouraged local investors to pick up bargains, they said.
Buying in the local equity market focused on large cap stocks across the board, pushing up the main board by more than 200 points by the end of the session, they added.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 239.70 points, or 2.44 percent, at 10,045.81, after moving between 9,740.76 and 10,046.01 on turnover of NT$143.54 billion (US$4.65 billion).
The market opened up 5.47 points on a slight rebound with investors remaining cautious following a fall on Wall Street, where the Dow Jones Industrial Average fell 545 points overnight after a more than 800 point drop on Wednesday, dealers said.
Buying accelerated on the local main board in line with other regional markets as investors appeared to calm down, rushing to buy into heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and smartphone camera lens supplier Largan Precision Co.
"The gains posted by other regional markets relieved many investors to some extent," Hua Nan Securities analyst Kevin Su said. "More important, futures on Wall Street have moved higher by more than 1 percent, which gives hope that the Dow spot market will bounce back today."
On Thursday, the Taiex fell 6.31 percent to below 10,000 points for the first time since the main board closed above that level in May 2017. The plunge resulted from global volatility as treasury yields in the U.S. market spiked, which raised fears over the speed at which the Federal Reserve is hiking interest rates.
"Fortunately, consumer price growth in the U.S. market slowed to 0.1 percent in September from a 0.2 percent increase in August," Su said. "So, treasury yields in the U.S. market came off accordingly, assuaging fears over a quicker rate hike by the Fed."
Su said Thursday's plunge led many bargain hunters to enter the market, buying into large cap stocks in both electronics and non-high tech sectors throughout the session.
Among gaining tech heavyweights, TSMC, the most heavily weighted stock on the local market, rose 4.18 percent to close at the day's high of NT$237.00 with 47.12 million shares changing hands. Led by TSMC, the bellwether electronics sector ended up 3.23 percent.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. added 2.57 percent to close at NT$71.90, while shares in Largan, a camera lens supplier to Apple Inc., soared 10 percent, the maximum daily increase, to end at NT$3,555.00 after reporting a more than 50 percent sequential increase in net profit for the third quarter.
Buying also spread to old economy stocks with shares in Formosa Chemicals & Fibre Corp. rising 3.95 percent to close at NT$118.50, and Formosa Plastics Corp. gaining 2.91 percent to end at NT$106.00.
Food brand Uni-President Enterprises Corp. added 3.85 percent to close at NT$72.90, and China Steel Corp., the largest steel maker in Taiwan, rose 1.24 percent to end at NT$24.50.
In the financial sector, which closed up 1.21 percent, Mega Financial Holding Co. rose 1.89 percent to close at NT$27.00 and CTCB Financial Holding Co. grew 2.60 percent to end at NT$21.70.
"Despite the gains, I prefer to say it was technical in nature," Su said. "We have to watch to see whether the rebound will continue to push the Taiex up further over the 5-day moving average of 10,257 to make the main board technically healthier for further upturns."
Su said investors should keep an eye on the current earnings season in Taiwan and Wall Street, which could move share prices down the road.
Source: Focus Taiwan News Channel