Taipei: Shares in Taiwan closed sharply higher on Monday, fueled by optimism surrounding the ongoing trade talks between the United States and China, alongside expectations of a potential interest rate cut by the U.S. Federal Reserve this week. This surge in investor confidence led to a significant buying spree, though the index failed to maintain its position above the 28,000-point mark by the session's end due to profit-taking activities in key stocks like Taiwan Semiconductor Manufacturing Co. (TSMC).
According to Focus Taiwan, the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended the day up 461.37 points, or 1.68 percent, settling at 27,993.63. This was just off a session high of 28,196.33, with a total turnover amounting to NT$548.05 billion (US$17.81 billion). Market sentiment was buoyed by news that U.S. and Chinese negotiators had reached a framework for a trade deal ahead of a crucial meeting between U.S. President Donald Trump and Chinese President Xi Jinping scheduled for Thursday in South Korea.
Masterlink Securities analyst Tom Tang noted that the positive sentiment from the U.S.-China trade discussions encouraged local investors to increase their holdings. "Buying focused on tech stocks as many investors were hoping for a rate cut by the Fed after Washington reported cooler than expected inflation in September," Tang said. He explained that lower interest rates enhance the attractiveness of tech stocks due to their dividend yields.
TSMC, Taiwan's most heavily weighted stock, saw its shares rise by 2.07 percent to close at NT$1,480.00, after reaching a high of NT$1,500.00 earlier in the day. This decline from its peak resulted in the Taiex losing approximately 160 points. Tang mentioned that the NT$1,500 mark served as a psychological barrier for some investors, though TSMC's fundamentals remain robust amidst the boom in artificial intelligence development.
In the broader semiconductor sector, shares in MediaTek Inc. climbed 3.09 percent to NT$1,335.00, while ASE Technology Holding Co. experienced a 3.32 percent increase to close at NT$202.50. Nanya Technology Corp., a memory chip supplier, reached the maximum daily increase of 10 percent, ending at NT$120.00.
Other tech stocks benefiting from the AI trend included Hon Hai Precision Industry Co., which gained 3.14 percent to NT$246.50, and Quanta Computer Inc., which rose 5.45 percent to NT$309.50. However, non-tech industries lagged, with Eclat Textile Co. and Makalot Industrial Co. experiencing declines of 1.71 percent and 3.14 percent, respectively.
In the steel sector, Tung Ho Steel Corp. saw a decrease of 1.44 percent, closing at NT$61.80, while China Steel Corp., Taiwan's largest steelmaker, managed a slight gain of 0.26 percent to NT$18.95. Meanwhile, Hua Eng Wire and Cable Co. and Walsin Lihwa Corp. rose by 5.33 percent and 3.22 percent, respectively, driven by higher copper prices.
The financial sector saw a 0.42 percent decline, despite Mercuries Life Insurance Co. surging 10 percent to NT$7.39 amid reports of potential acquisition interest from E. Sun Financial Holding Co., which itself fell 7.02 percent to NT$30.30.
Despite the positive developments in the U.S.-China trade talks, Tang advised caution, noting that uncertainties persist until a formal deal is finalized. Foreign institutional investors bought a net NT$32.64 billion worth of shares on the main board, according to the TWSE.