Taiwan shares end above 16,400 points following U.S. rebound – Focus Taiwan

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Taipei, Oct. 5 (CNA) Shares in Taiwan moved higher to close above 16,400 points Thursday after buying was triggered by a U.S. market rebound overnight and as treasury yields eased, dealers said.

On the back of the gains posted by tech stocks on the U.S. markets, a strong performance in the bellwether electronics sector, particularly large-cap semiconductor stocks, led to the local main board trending up throughout the session, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 180.14 points, or 1.11 percent, at 16,453.52 after moving between 16,313.89 and 16,477.61. Turnover totaled NT$240.04 billion (US$7.44 billion). On Wednesday, the Taiex had lost 1.10 percent.

The market opened 0.25 percent up and momentum soon accelerated as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) attracted buyers in the wake of a 1.35 percent increase on the tech-heavy Nasdaq index and a 1.43 percent rise on the Philadelphia Semiconductor Index overnight, dealers said.

The upturn seen by tech stocks at home and abroad reflected easing concerns regarding aggressive policy by the U.S. Federal Reserve after the benchmark 10-year treasury yield fell from its 2007 high in the wake of the latest ADP report which showed private job growth totaled just 89,000 in September, below an earlier market estimate of 160,000, dealers added.

The strength of the electronics sector continued until the end of the session with old economy and financial stocks staging a rebound to help the Taiex jump ahead of the five-day moving average of 16,418 points, dealers said.

“The local investor sentiment was, again, dictated by U.S. markets so it was no surprise that tech stocks here followed their U.S. counterparts in moving higher today,” Concord Securities analyst Kerry Huang said.

“But turnover remained limited, which indicates many investors were unwilling to chase prices because there is no signal that U.S. markets have completely left recent volatility behind,” Huang said. “Many investors have kept alert over political implications in Washington after Republican House Representative Kevin McCarthy was ousted as speaker earlier this week.”

Despite the Taiex gains, foreign institutional investors sold a net NT$1.27 billion worth of shares on the main board Thursday.

On Thursday, Huang said, the Taiex rose following significant buying of semiconductor stocks, with TSMC, the most heavily weighted stock in the local market, rising 1.54 percent to close at NT$528.00 after a 1.70 percent fall a session earlier.

TSMC’s gains boosted the electronics index and the semiconductor sub-index by 1.22 percent and 1.54 percent, respectively, and contributed almost 70 points to the Taiex’s rise.

“Large-cap tech stocks remained a focus in the market with TSMC posting the highest turnover among the stocks listed on the main board,” Huang said. TSMC’s turnover totaled about NT$13.30 billion on Thursday, the TWSE’s data showed.

Among other semiconductor stocks, dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. rose 2.66 percent to end at NT$69.50, United Microelectronics Corp., a smaller contract chipmaker, gained 2.38 percent to close at NT$45.15, and IC packaging and testing services provider ASE Technology Holding Co. added 2.28 percent to end at NT$112.00.

Huang said stocks related to artificial intelligence development appeared mixed. AI server maker Wistron Corp. rose 0.94 percent to close at NT$107.00, while rival Quanta Computer Inc. fell 0.40 percent to end at NT$249.50, but the stock posted the second highest turnover of NT$10.02 billion — after TSMC — on the main board.

In addition, PC brand Asustek Computer Inc., which also rolls out AI servers, rose 2.56 percent to close at NT$380.00, and its counterpart Acer Inc. gained 2.89 percent to end at NT$37.40.

Old economy stocks largely moved up in line with the Taiex but “the gains were technical in nature as it was too early to say if the Taiex had stabilized,” Huang said.

On the back of a fall in international crude oil prices overnight, China Airlines rose 5.60 percent to close at NT$21.70, and EVA Airways gained 5.12 percent to end at NT$29.75.

The falling fuel prices also boosted shipping stocks, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rising 1.82 percent to close at NT$112.00 and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. growing 0.79 percent and 0.86 percent, respectively, to end at NT$44.90 and NT$46.75.

Elsewhere in the old economy sector, Fortune Electric Co. rose 5.71 percent to close at NT$287.00 and Teco Electric & Machinery Co. gained 2.02 percent to end at NT$50.60 on hopes that they will benefit from the smart electricity grid network development plan from state-own electricity supplier Taiwan Power Co.

In the financial sector, which rose 0.97 percent, Fubon Financial Holding Co. gained 1.34 percent to close at NT$60.50, and Cathay Financial Holding Co. added 1.15 percent to end at NT$44.05.

“In addition to monitoring the political struggles in Washington, investors should keep an eye on the upcoming September non-farm payroll data (due Friday) closely for more insight into what the Fed’s next move could potentially be,” Huang said.

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