Shares in Taiwan moved higher Monday as market sentiment was boosted by gains in U.S. markets at the end of last week because of reduced concerns over future interest rate hikes by the Federal Reserve, dealers said.
The bellwether electronics sector led the upturn, especially large semiconductor stocks, because of the sector’s strong performance in U.S. markets, and interest then spread to old economy and financial stocks to push the market over the 13,200-point mark, dealers said.
The Taiex, the Taiwan Stock Exchange’s weighted index, ended up 197.02 points, or 1.51 percent, at 13,223.73 after moving between 13,103.35 and 13,246.59. Turnover totaled NT$204.65 billion (US$6.38 billion).
The market opened up 0.63 percent after a 1.28 percent rise on the tech-heavy Nasdaq index and a 4.60 percent surge on the Philadelphia Semiconductor Index on Friday.
Those markets were buoyed by a mixed U.S. jobs report, which raised hopes the Fed will slow the pace of its rate hikes, dealers said.
TSMC
Buying in Taiwan was further sparked Monday by local media reports that contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) had received orders from U.S. based IC designer Advanced Micro Devices (AMD).
According to the reports, AMD gave TSMC orders for chips using the advanced 5 nanometer process for its graphics processing units and central processing units, driving the broader market almost to the day’s high by the end of the session, dealers said.
“Friday’s tech stock gains in the U.S. markets indicated that many investors were calmer following the volatility seen earlier last week because of Fed Chair Jerome Powell’s hawkish tone after a policymaking meeting Wednesday,” Concord Securities analyst Kerry Huang said.
Powell said it was “premature” to think about a pause on rate increases, but Susan Collins, a regional Fed president, said the central bank was still weighing the impact of tightening compared to easing up on rates too quickly following the mixed October job data.
“Judging by the buying in tech heavyweights around the world, I think market sentiment, which had been badly hurt by rapid rate hikes by the Fed, improved to some extent,” Huang said. “In Taiwan, turnover increased, indicating investors appeared more willing to buy.”
Weakening U.S. dollar
A weakening U.S. dollar also prompted investors to pick up tech stocks, Huang said, noting that a stronger Taiwan dollar lowered concerns over a fund flight from the local market.
On Monday, the greenback fell by NT$0.103 against the Taiwan dollar to close at NT$32.082.
Huang said TSMC, the most heavily weighted stock in the local market, again anchored the Taiex’s upturn Monday, gaining 2.09 percent to close at NT$390.00 after its American depositary receipts (ADRs) rose 3.65 percent in the United States on Friday.
Led by TSMC, the electronics sector rose 1.57 percent, and the semiconductor sub-index finished 2.34 percent higher.
“The reports on AMD’s orders to TSMC eased fears over inventory adjustments in the global industry, giving an additional boost to the stock and even to the entire local semiconductor sector,” Huang said.
Other tech stocks
Among other semiconductor stocks, application-specific integrated circuit designer Alchip Technologies Ltd. soared 10 percent, the maximum daily increase, to end at NT$797.00.
IC packaging and testing services provider ASE Technology Holding Co. gained 4.97 percent to close at NT$84.50, smartphone IC designer MediaTek Inc. rose 3.85 percent to end at NT$620.00, and contract chipmaker United Microelectronics Corp. rose 2.96 percent to close at NT$40.05.
Also in the electronics sector, PC brand Acer Inc. surged 6.61 percent to end at NT$24.20, while Asustek Computer Inc., another PC vendor, gained 1.28 percent to close at NT$237.50.
Bucking the upturn, iPhone assembler Hon Hai Precision Industry Co. lost 0.50 percent to end at NT$100.00 after Apple said production of its latest high-end iPhone 14 Pro and iPhone 14 Pro Max in Zhengzhou, China, was “significantly” affected by China’s zero tolerance COVID-19 policy.
It was referring to a huge factory complex in Zhengzhou run by Hon Hai, the world’s largest contract electronics maker.
Old economy stocks
Huang said old economy stocks also gained ground. Cable and wire supplier Walsin Lihwa Corp. surged 10 percent to close at NT$40.45 after strong third quarter results, and buying spread to Hua Eng Wire and Cable Co., which also rose 10 percent to end at NT$14.95.
Elsewhere in the old economy sector, Nan Ya Plastics Corp. rose 3.09 percent to close at NT$70.00, and Formosa Plastics Corp. rose 2.05 percent to end at NT$84.60.
Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 3.24 percent to close at NT$143.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 1.80 percent and 5.11 percent, respectively, to end at NT$62.30 and NT$70.00.
In the financial sector, Fubon Financial Holding Co. rose 2.52 percent to close at NT$52.80, and Cathay Financial Holding Co. added 1.54 percent to end at NT$39.55.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$9.20 billion in shares on the market Monday.
Source: Focus Taiwan News Channel