Taipei, Shares in Taiwan extended their momentum from a session earlier to close above the 16,200-point mark Friday following a rally on American markets, dealers said.
The gains were capped by the end of the session, however, as some investors decided to pocket their gains, especially in large cap tech stocks amid lingering concerns over U.S. Treasury yields, they said.
The Taiex, the Taiwan Stock Exchange’s main weighted index, ended up 75.62 points, or 0.47 percent, at 16,255.18, after moving between 16,166.35 and 16,298.03. Turnover was NT$297.96 billion (US$10.59 billion).
The market opened up 0.38 percent and rose to the day’s high within 10 minutes on interest in tech heavyweights after a 2.52 percent rise in the tech-heavy Nasdaq and gains of 4.09 percent by the Philadelphia Semiconductor Index on Thursday in the United States.
But selling set in as the Taiex approached 16,300 points, with investors pocketing significant gains posted by semiconductor stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), to cap the upturn by the end of the session, they said.
“Today’s gains showed continued interest in large tech stocks from Thursday as investors reacted to the overnight rally on U.S. markets,” Hua Nan Securities analyst Kevin Su said.
The Taiex rose 1.68 percent on Thursday.
“But concerns over a possible hike in U.S. Treasury yields remained in place, and some investors preferred to sell shares and hold cash to be ready for the next buying opportunities,” Su said.
On Thursday, the yield on benchmark 10-year Treasury bills rose to 1.52 percent, from 1.51 percent seen late Wednesday. It breached the 1.6-percent mark late last week.
“Investors do not like rising interest rates, which make tech stocks with high valuations look less attractive,” Su said. “That’s why semiconductor stocks largely came off their highs today. Their fundamentals are still sound.”
TSMC, the most heavily weighted stock in the local market, rose 0.82 percent to close at NT$614.00 after hitting a high of NT$618.00. Driven by movements in TSMC shares, the semiconductor sub-index ended at 410.46, off a high of 414.10.
Among other semiconductor stocks that also saw profit-taking, United Microelectronics Corp., a smaller contract chipmaker, gained 0.92 percent to end at NT$49.10, and IC designer MediaTek Inc. added 1.24 percent to end at NT$899.00.
“While semiconductor heavyweights came off their highs, investors still looked for bargains in the electronics sector, and Hon Hai Precision Industry Co. was one of them,” Su said.
Hon Hai, the world’s largest contract electronics maker and the second largest stock in Taiwan in terms of market capitalization, soared 2.56 percent to close at NT$120.00.
“The stock has lagged behind the broader market for some time. Today’s catch-up buying largely focused on its efforts to penetrate the electric car market,” Su said.
Another market laggard, notebook computer ODM services provider Quanta Computer Inc. rose 1.96 percent to end at NT$88.50.
In addition, Yageo Corp., the largest multi-layer ceramic capacitor (MLCC) maker in Taiwan, rose 1.24 percent to close at NT$572.00 after it reported more than 80 percent net profit growth in 2020.
The market focused mostly on the electronics sector Friday, leaving old economy and financial stocks to move in a narrow range throughout the session, dealers said.
China Steel Corp., the largest steel maker in Taiwan, rose 0.39 percent to close at NT$25.90, and Formosa Chemicals & Fibre Corp. added 0.56 percent to end at NT$89.50, while Formosa Plastics Corp. closed unchanged at NT$105.00.
The real estate development sector was hit by a new government move to rein in property speculation through higher taxes on gains in the sale of housing units.
Highwealth Construction Corp. fell 0.88 percent to close at NT$44.95 and Goldsun Building Materials Co. lost 0.80 percent to end at NT$24.75.
“The Taiex still moved upwards, but the pace of its gains is expected to moderate as there are high technical hurdles at around 16,579 points, the intraday high of Feb. 22,” Su said.
According to the TWSE, foreign institutional investors bought a net NT$6.03 billion in shares on the market Friday.
Source: Focus Taiwan News Channel