Taipei, Shares in Taiwan jumped more than 200 points Wednesday to close above 10,700 on optimism over a resolution of the trade war between China and the United States as their leaders are expected to meet next week.
Investors here were also encouraged by the gains on the U.S. markets Tuesday, and they bought into large-cap tech stocks, which had been hit hard in recent sessions by the global trade concerns, dealers said.
The weighted index on the Taiwan Stock Exchange (Taiex) ended up 208.60 points, or 1.97 percent, at 10,775.34, after moving between 10, 650.48 and 10,778.64. Turnover totaled NT$140.86 billion (US$4.49 billion) during the session.
The market opened up 0.79 percent as investors took cues from the upturn on the U.S. markets, where the Dow Jones Industrial Average closed up 1.35 percent and the tech-heavy Nasdaq index ended up 1.39 percent overnight, dealers said.
As interest in the bellwether electronics sector grew, the main board cleared the stiff technical resistance point ahead of 10,700 and ended even higher, dealers said.
Investors were focused on "Huawei concept stocks," companies in the supply chain to Chinese telecom equipment maker Huawei Technologies Co., which has been facing restrictions imposed by the U.S., dealers said.
The optimism in the Taiwan market was spurred by U.S. President Donald Trump's tweet Tuesday that he would meet with Chinese President Xi Jinping at the G20 summit in Japan next week, analysts said.
"It seemed market sentiment was boosted a lot by Trump's announcement," Yong Cheng International Securities Investment Consulting analyst Jerry Chen said. "After the recent heavy losses by tech stocks, many bargain hunters returned today to buy."
In his tweet, Trump said he had engaged in a "very good telephone conversation" with Xi, and they would have "an extended meeting" at the G20 summit in Osaka next week after discussions by their respective teams.
"After Trump's tweet, bargain hunters rushed to pick up large-cap stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co., (TSMC) one of Huawei's suppliers," Chen said. "The high turnover of more than NT$140 billion clearly indicated strong buying."
On Tuesday, the trading volume on the Taiex was an anemic NT$80.98 billion.
"I think foreign institutional investors also joined the bargain hunting today," Chen said.
According to Taiex data, foreign institutional investors bought a net NT$17.96 billion worth of shares on the main board Wednesday.
TSMC, the most heavily weighted stock on the local market, rose 3.61 percent to close at the day's high of NT$244.00, with 50.07 million changing hands. Its gains pushed up the Taiex by about 85 points and the electronics sector by 2.77 percent.
Among other Huawei's suppliers, printed circuit board maker Unimicron Technology Corp. jumped by the daily maximum 10 percent, to end at NT$34.75, Nanya Printed Circuit Board Corp. rose 8.85 percent to close at NT$39.35, and Wired communications device producer LandMark Optoelectronics Corp. finished 6.56 percent higher at NT$243.50.
Chen said "Apple concept stocks" also attracted buying on hopes that the next generation of iPhones, which are expected to be released in the second half of the year, will boost their shipments.
Among those stocks, smartphone camera lens supplier Largan Precision Co. rose 7.56 percent to close at NT$3,985.00, and iPhone assembler Hon Hai Precision Industry Co. climbed 1.71 percent to end at NT$77.20.
The buying also spread to non-tech stocks, with food brand Uni-President Enterprises Corp. rising 1.00 percent to close at NT$81.20, and Formosa Petrochemical Corp. ending 1.72 percent higher at NT$118.50.
In the financial sector, which rose 1.29 percent, Yuanta Financial Holding Co. jumped 2.76 percent to end at NT$18.60 and Mega Financial Holding Co. gained 1.46 percent to close at NT$31.25.
Chen said investors should pay close attention not just to the upcoming G20 summit but also to the conclusions of the U.S. Federal Reserve at the end of its current meeting, which will offer clues about a possible adjustment of interest rates.
Source: Focus Taiwan News Channel