Taiwan shares end up in last Year of the Rabbit session – Focus Taiwan

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Taipei, Feb. 5 (CNA) Shares in Taiwan closed higher on Monday, the last trading session in the Year of the Rabbit, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market.

However, old economy and financial stocks largely moved lower, with investors likely anxious about possible negative global events occurring during the holiday.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 36.14 points, or 0.20 percent, at 18,096.07 after moving between 17,992.17 and 18,115.80. Turnover totaled NT$315.90 billion (US$10.07 billion).

The local stock market will be closed until Feb. 14, the last day of the seven-day New Year holiday, which will begin Thursday.

The market opened down 12.53 points and continued to stay below the previous closing level in the early morning session, with investors ignoring a rally by the U.S. markets on Friday when the Dow Jones Industrial Average rose 0.35 percent and the tech-heavy Nasdaq index gained 1.75 percent on the back of strong corporate earnings by companies such Mega and Amazon.

Buying of TSMC shares accelerated towards the end of the session, closing at NT$646.00, up 1.73 percent, helping the market enter positive territory. TSMC’s gains were equivalent to about 90 Taiex points and sent the electronics index and semiconductor sub-index higher by 0.64 percent and 1.05 percent.

“Without TSMC, the Taiex would have fallen today,” Mega International Investment Services Corp. analyst Alex Huang said. “At a time when the U.S. dollar regained its footing, foreign institutional investors have refrained from buying. I suspect TSMC buying largely came from government-led funds to sustain the Taiex above 18,000 points.”

According to the TWSE, foreign institutional investors sold a net NT$6.17 billion worth of shares on the main board Monday, when the U.S. dollar ended up NT$0.132 to close at NT$31.375 against the Taiwan dollar.

Huang said optimism toward TSMC’s outlook has been raised by the chipmaker’s rosy guidance given in mid-January in which sales were forecast to grow 21-26 percent in 2024, beating an earlier market estimate of 20 percent.

“I expect TSMC will continue to steam ahead and challenge NT$688, the intraday high seen on Jan. 17, 2022, soon,” Huang said.

Among other semiconductor stocks, which had mixed performances, United Microelectronics Corp., a smaller contract chipmaker, lost 0.93 percent to end at NT$48.10, while smartphone IC designer MediaTek Inc. rose 0.11 percent to close at NT$937.00. In addition, Global Unichip Corp., TSMC’s application-specific integrated circuit (ASIC) design subsidiary, plunged 10 percent, the maximum daily decline, to end at NT$1,425.00 in the wake of its disappointing guidance for 2024.

Also in the electronics sector, select stocks related to artificial intelligence development attracted buying, with AI server maker Quanta Computer Inc. up 0.79 percent to close at NT$255.00, and its smaller rival Wistron Corp. up 3.75 percent to end at NT$124.50.

Meanwhile, iPhone assembler Hon Hai Precision Industry Co. lost 0.49 percent to close at NT$101.50, and smartphone camera lens maker Largan Precision Co., another supplier to Apple Inc., ended down 0.42 percent at NT$2,355.00.

“With the Lunar New Year holiday looming, many local investors have turned more cautious and appeared reluctant to hold onto their stocks,” Huang said. “Many large-cap old economy and financial stocks fell victim to such mentality.”

With the petrochemical index falling 1.61 percent, Nan Ya Plastics Corp. shed 2.24 percent to close at NT$61.00, and Formosa Petrochemical Corp. also lost 2.24 percent to end at NT$74.30. In addition, Formosa Plastics Corp. dropped 1.50 percent to close at NT$72.40, and Formosa Chemicals & Fibre Corp. ended down 1.38 percent at NT$57.10.

In the textile industry, which lost 0.92 percent, Far Eastern New Century Corp. lost 1.29 percent to close at NT$30.65, and Eclat Textile Co. fell 0.71 percent to end at NT$556.00.

Elsewhere in the old economy sector, paper brand YFY Inc. shed 1.99 percent to close at NT$29.55, and rival Longchen Paper & Packaging Co. shed 1.08 percent to end at NT$13.75.

In the financial sector, which lost 0.63 percent, Fubon Financial Holding Co. rose 0.31 percent to close at NT$64.70, and Cathay Financial Holding Co. dropped 0.45 percent to end at NT$43.90. Bucking the downtrend, Yunata Financial Holding Co. rose 0.37 percent to close at NT$27.00.

“Judging from the Taiex performance in recent sessions, the 18,000-point mark seemed to become the main board’s technical support,” Huang said. “I expect momentum on the U.S. markets will continue due to a strong earnings season so the local index is likely to keep moving higher as investors return from the holiday.”

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