Taipei--Shares in Taiwan closed at a 27-year high on Monday as the Dow Jones Industrial Average's latest record high at the end of last week gave investors confidence to push prices higher, dealers said.
Interest focused on large-cap high-tech stocks, in particular "Apple concept" stocks, ahead of Apple's expected launch of its next generation iPhones later in the quarter. Buying also spread to old economy and financial stocks, further boosting the market, they said.
The weighted index on the Taiwan Stock Exchange closed up 72.82 points, or 0.69 percent, at 10,579.38, after moving between 10,521.69 and 10,592.31, on turnover of NT$126.554 billion (US$4.28 billion).
The market opened up 0.14 percent and the positive momentum accelerated as investors were encouraged by the Dow Jones Industrial Average ending at a record high for the eighth consecutive session on Friday on strong July jobs data, dealers said.
Investors were especially bullish on local electronics heavyweights, including contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and iPhone assembler Hon Hai Precision Industry Co. (??), helping the broader market sustain its strength throughout the session, dealers said.
"The local equity market is still being dictated by Wall Street, as the two markets are highly correlated," Taishin Securities Investment Advisory analyst Tony Huang said.
"It was no surprise that the local weighted index overcame stiff technical resistance ahead of 10,545 points and closed at a 27-year high," Huang said.
After jumping over technical hurdles ahead of an intraday high of 10,545 seen on June 27, the weighted index closed at its highest level since finishing at 10,907.09 on April 4, 1990.
"Today's gains made the market technically healthier, paving the path for a further upturn in the short term as market sentiment has improved," Huang said.
Huang said the bellwether electronics sector closed up 0.90 percent amid optimism over shipments by major Taiwanese suppliers to Apple in the second half of this year.
Among the rising Apple concept stocks, TSMC, the most heavily weighted stock in the local market, gained 1.41 percent to close at NT$216.00, with 21.56 million shares changing hands.
Hon Hai, Taiwan's second largest stock in terms of market capitalization, added 1.67 percent to end at NT$121.50.
Also in the Apple supply chain, metal casing maker Catcher Technology Co. (??) rose 3.84 percent to close at NT$292.00, while smartphone camera lens supplier Largan Precision Co. (???) fell 0.78 percent to end at NT$5,695.00 as investors pocketed gains seen in recent sessions.
Huang said the generally upbeat mood also led investors to buy into stocks outside the electronics sector.
In the old economy sector, Formosa Plastics Corp. (??) rose 0.65 percent to close at NT$93.00 and Formosa Chemicals & Fibre Corp. (??) gained 0.54 percent to end at NT$92.70.
Textile firm Far Eastern New Century Corp. (???) added 0.61 percent to close at NT$24.70.
In the financial sector, which closed up 0.63 percent, Mega Financial Holding Co. (???) rose 1.55 percent to end at NT$26.20, and Fubon Financial Holding Co. (???) gained 1.06 percent to close at NT$47.85.
"While further gains on the market are possible, investors should stay alert this week as all of the listed companies report their July sales by Aug. 10, which could move the market," Huang said.
Source: Focus Taiwan News Channel