Taipei, Shares in Taiwan jumped more than 100 points to close above the 10,700-point mark Monday as investors moved in to pick up market heavyweights, in particular in the bellwether electronics sector, dealers said.
The buying was triggered by gains posted in the United States and in other Asian markets as trade friction between the U.S. and China took a backseat to other factors, they said.
The weighted index on the Taiwan Stock Exchange, the Taiex, closed up 111.71 points, or 1.05 percent, at 10,720.28, after moving between 10,638.90 and 10,746.74, on turnover of NT$136.27 billion (US$4.48 billion).
The market opened up 0.29 percent after the Dow Jones Industrial Average closed up 0.41 percent and the tech-heavy Nasdaq ended up 1.34 percent Friday on a better than expected non-farm payroll report for June, dealers said.
Seeing other regional markets moving higher, investors here rushed to buy into large-cap stocks, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and smartphone camera lens supplier Largan Precision Co., to push the broader market even higher, dealers said.
"While uncertainty remains over the trade dispute between Washington and Beijing, investors at home and abroad shrugged off such concerns to buy into bargains after recent weakness caused by the trade issue," Concord Securities analyst Kerry Huang said.
Trade friction between the world's two biggest economies become more tangible Friday when the United States announced new tariffs on US$34 billion worth of Chinese imports as scheduled, and Beijing responded with tariffs on US$34 billion worth of U.S. goods.
The two countries have prepared additional tariffs on another US$16 billion worth of each other's goods down the road.
"We will have to watch closely when the additional tariffs on the US$16 billion in goods come, and if there are more retaliatory measures," Huang said.
"Today's gains were technical in nature, and even if the rebound continues, some technical resistance is expected at around 10,800 points."
Huang said TSMC was one of the biggest beneficiaries on Monday, closing up 2.07 percent at NT$221.50 with 38.72 million shares changing hands.
Largan rose 6.84 percent to end at NT$4,920.00 on trading volume of 1.12 million shares.
"The Taiwan dollar moved higher against the U.S. dollar today, which eased concerns over a further fund exodus to some extent. So investors became more willing to buy market heavyweights today," Huang said.
The U.S. dollar fell NT$0.114 against the Taiwan dollar Monday to close at NT$30.386.
Aside from technical factors, the gains in Largan were also spurred by the increase in its June sales. Largan is scheduled to hold an investor conference on Thursday to detail its second quarter results and give guidance for the third quarter.
According to the TWSE, foreign institutional investors bought a net NT$6.06 billion worth of shares on the main board Monday.
Also in the high-tech sector, passive electronics component maker Yageo Corp. gained 5.37 percent to close at 1,020.00.
"Stocks like Yageo have been favored by local investors. Their gains showed local investors were willing to trade, a positive sign for the main board," Huang said.
Buying spread to non-tech stocks, with Formosa Plastics Corp. up 1.37 percent to close at NT$111.00, textile maker Far Eastern New Century Corp. gaining 2.70 percent to end at NT$32.35 and Taiwan Cement Corp. adding 2.76 percent to close at NT$42.75.
"A pullback amid the global trade concerns is possible after today's rebound, and the nearest technical support would be expected at around 10,478 points," an intraday low seen at the end of April," Huang said.
Source: Focus Taiwan News Channel