Taipei, Shares in Taiwan moved sharply higher to close above the 10,900 point mark Friday as old economy and financial stocks posted strong gains in the wake of a record high on Wall Street overnight, dealers said.
Despite its upturn, the bellwether electronics sector still underperformed the broader market as buying among the major "Apple concept stocks" remained relatively slow amid worries over shipments of the latest iPhones, they said.
Investors were also cautious ahead of a two-day policymaking meeting scheduled by the U.S. Federal Reserve to kick off on Sept. 25, as they waited for more indications on how the Fed will carry out its rate hike cycle, they added.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 141 points, or 1.30 percent, at the day's high of 10,972.41, off a low of 10,835.84, on turnover of NT$155.53 billion (US$5.06 billion).
The market opened up 0.24 percent and buying accelerated, in particular at around 10:30 a.m., as investors responded to the gains posted on Wall Street, where the Dow Jones Industrial Average rose more than 250 points to close at a record high overnight, dealers said.
Buying focused on the old economy and financial sectors, which offset the losses suffered by select "Apple concept stocks" during most of the session before bargain hunters became active and picked up some under performing tech stocks to push the Taiex up further by the end of the session, they said.
"Thanks to the solid gains enjoyed by non-tech stocks, in particular in the petrochemical and financial sectors, the main board jumped over technical hurdles ahead of the 10,900 point level," Concord Securities analyst Kerry Huang said.
"Judging from the movement of rising petrochemical and financial stocks, I suspect the buying generally came from government-led funds since those sectors have long been their favorites," Huang said.
Huang said due to the strong buying by government-led funds, Friday's turnover topped NT$150 billion, compared with NT$135.19 billion on Thursday.
Among the rising petrochemical stocks, Formosa Petrochemical Corp., which has replaced contract electronics maker Hon Hai Precision Industry Co. to become the second largest stock on the local market in terms of market value, soared 5.76 percent to close at NT$147.00.
Also in the petrochemical sector, Formosa Chemicals & Fibre Corp. added 4.92 percent to close at NT$128.00, Formosa Plastics Corp. gained 3.52 percent to end at NT$117.50 and Nan Ya Plastics Corp. rose 1.79 percent to close at NT$85.50.
"TSMC (Taiwan Semiconductor Manufacturing Co.) extended its gains today, which served as additional evidence of the support lent by the government," Huang said. "Before the 9-in-1 elections in November, I think government support could continue."
As the most heavily weighted stock on the local market, TSMC, a supplier of processors to iPhones, gained 0.58 percent to end at the day's high of NT$261.50 with 34.87 million shares changing hands.
"Compared with the broader market, the gains posted by the bellwether electronics sector were less significant as investors were concerned about shipments of the new iPhones" which went on global sale Friday, Huang said.
"Some of them recovered earlier losses simply because of a technical rebound after recent steep slumps," Huang said.
Recouping all of its earlier losses on bargain hunting, shares in Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 1.84 percent to close at NT$3,870.00, off a low of NT$3,425.00. The stock came under heavy pressure in the morning session after the company gave a cautious sales outlook for September.
Shares in iPhone assembler Hon Hai rose 0.26 percent to end at NT$75.80, off a low of NT$75.10, and Catcher Technology Co., a metal casing supplier to Apple, gained 0.59 percent to close at NT$339.50 after hitting a low of NT$325.00.
"Investors had better keep a close eye on the upcoming Fed meeting for more clues about how the U.S. central bank will raise interest rates down the road," Huang said.
Source: Focus Taiwan News Channel