Shares in Taiwan moved higher to end above the 15,000-point mark Wednesday as the electronics sector recouped early losses, helping the broader market climb out of its previous doldrums, dealers said.
Turnover remained thin, however, as investors remained cautious amid lingering concerns over possible volatility among tech stocks in the U.S., which could be affected by expectations of Federal Reserve interest rate hikes, they said.
The Taiex, the Taiwan Stock Exchange's (TWSE) weighted index, ended up 141.81 points, or 0.95 percent, at the day's high of 15,095.44 after coming off a low of 14,874.33. Turnover totaled NT$207.89 billion (US$6.85 billion).
The market opened down 0.28 percent and soon fell to the day's low after a 0.96 percent fall in the Dow Jones Industrial Average and a 1.12 percent decline in the tech-heavy Nasdaq index overnight, dealers said.
Dow futures trending higher
After 11 a.m., however, bargain hunters emerged and picked up large cap semiconductor stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.
"The Dow has moved lower for three straight sessions due to concerns over a hawkish Fed, and its latest losses dictated the initial downturn on the Taiex today," Cathay Futures Consultant analyst Tsai Ming-han said.
"But Dow futures then started trending higher, pointing to a possible rebound on the spot market later in the day, which encouraged investors in Taiwan to find value," Tsai said.
Tsai said the electronics sector regained its footing as TSMC, the most heavily weighted stock in the local market, rose 1.81 percent to close at the day's high of NT$505.00, off a low of NT$492.00.
TSMC's gains contributed about 75 points alone to the Taiex's increase, and pushed up the electronics sector and the semiconductor sub-index by 1.19 percent and 1.70 percent, respectively.
"It remains to be seen whether TSMC will test the NT$500 mark again. It will depend on the performance of tech stocks on U.S. markets, as they are highly correlated with their Taiwanese counterparts," Tsai said.
Other tech stocks
Among other large cap semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, rose 1.73 percent to end at NT$41.10, and smartphone IC designer MediaTek Inc. gained 1.52 percent to close at NT$667.00.
But application-specific IC (ASIC) designer Alchip Technologies Ltd. bucked the upturn, shedding 1.04 percent to end at NT$857.00.
Also in the electronics sector, leading flat panel makers continued the uptrend seen Tuesday, with AU Optronics Corp. closing 2.13 percent higher at NT$16.75 and Innolux Corp. gaining 1.26 percent to end at NT$12.10 on the back of a recovery in TV screen prices.
In addition, iPhone assembler Hon Hai Precision Industry Co. added 0.46 percent to close at NT$109.00, while power management solutions provider Delta Electronics Inc. lost 0.38 percent to end at NT$263.00.
Outside electronics serctor
Buying was also seen in the non-tech sector, with the biotech sector in focus, gaining 1.90 percent, dealers said.
Medical equipment supplier Maxigen Biotech Inc. soared 10 percent, the maximum daily increase, to close at NT$49.40, drug developer China Chemical & Pharmaceutical Co. rose 2.23 percent to end at NT$22.90, and test kit brand Panion & BF Biotech Inc. added 1.64 percent to close at NT$154.50.
Airline stocks gained ground amid hopes that the government will ease border controls soon, dealers said.
In the transportation sector, which rose 0.69 percent, China Airlines gained 2.47 percent to close at NT$22.80, and rival EVA Airways rose 2.27 percent to end at NT$33.75.
In the financial sector, which rose 0.80 percent, E. Sun Financial Holding Co. added 1.99 percent to close at NT$28.20, and Mega Financial Holding Co. rose 1.27 percent to end at NT$35.90.
"With the Taiex rising above 15,000 points, it could consolidate for some time ahead of the nearest technical resistance at around 15,150 points," Tsai said. "Investors should pay close attention to fluctuations in the U.S. markets."
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$2.74 billion in shares Wednesday.
Source: Focus Taiwan News Channel