Taipei, Taiwan shares soared more than 100 points in the mid-morning session Monday as buying was sparked by a strong showing on Wall Street at the end of last week, dealers said.
Large cap stocks, particularly in the bellwether electronics sector, led the upturn on the broader market as investors rushed to pick up tech heavyweights after the NASDAQ index hit a fresh high on Friday, dealers said.
While the United States created more jobs than expected in February, wage growth slowed from a month earlier, which led investors to think that the U.S. Federal Reserve will not speed up its interest rate high cycle, dealers said.
As of 10:38 a.m. Monday, the weighted index on the Taiwan Stock Exchange had gained 144.99 points, or 1.33 percent, rising to 11,009.81 billion on turnover of NT$75.73 billion (US$2.58 billion).
"Wall Street dominated market sentiment here again as investors were encouraged by a rally on the U.S. market and jumped onto the trading floor soon after the market opened," Hua Nan Securities analyst Kevin Su said.
On Friday, the Dow Jones Industrial Average closed up 440 points, or 1.77 percent, returning to the 25,000 point mark after the U.S. non-farm payroll reports showed 313,000 new jobs in February, higher than the forecast 200,000. The U.S. wage growth, however, slowed to 2.6 percent from 2.8 percent in January.
"Investors hailed the continued growth of the U.S. economy but since wage increases slowed down, investors are thinking that the Fed is unlikely to raise interest rates too quickly," Su said.
On the Taiwan market, investors were chasing electronics stocks in particular on Monday after the tech-heavy NASDAQ rose 1.79 percent on Friday to a new high.
"The local main board has been moving up sharply this morning on the back of strong buying in the electronics sector, while the increased turnover has helped the broader market clear the stiff technical resistance ahead of 10,937 points, which was an intra-day high on Feb. 27," Su said.
As of 10:38 a.m., the electronics sector had gained 1.31 percent and the semiconductor sub-index had risen 1.63 percent.
Among the gaining electronics heavyweights, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, was up 1.60 percent at NT$254.50.
Among other high-tech stocks, iPhone assembler Hon Hai Precision Industry Co. had climbed 2.16 percent to NT$94.30 on follow-through buying from the previous session after its Internet-focused subsidiary Foxconn Industrial Internet Co. Ltd. secured regulatory approval from China to launch an IPO in Shanghai.
The buying also spread to the financial sector, with Cathay Financial Holding Co. rising 4.81 percent to NT$54.50 and Fubon Financial Holding Co. up 2.97 percent at NT$52.00.
"Judging from the expanding turnover, it seems that the main board's trading volume will hit NT$150 billion, which will further fuel the Taiex," Su said.
Source: Focus Taiwan News Channel