Shares in Taiwan moved higher for the fourth consecutive session Thursday as the financial sector was boosted by hopes that U.S. Federal Reserve will kick off a rate-hike cycle later this year to push up financial institutions' returns from their overseas investments, according to dealers.
Ahead of an investor conference to open after the market close, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) rose slightly higher, while other select semiconductor stocks got rotational buying to lend support to the broader market.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 61.53 points, or 0.33 percent, at 18,436.93, after moving between 18,346.81 and 18,459.73. Turnover totaled NT$277.37 billion (US$10.03 billion).
The market opened down 0.10 percent and soon regained its footing to hit the day's high in the early morning session as investors took cues from the gains on the U.S. markets, where the Dow Jones Industrial Average rose 0.11 percent and the tech-heavy Nasdaq index added 0.23 percent overnight.
Large-cap financial stocks led the upturn throughout the session with the financial sector rising 2.30 percent on rate-hike hopes to serve as an anchor to stabilize the broader market, while TSMC moved below the previous session during most of the day before late-session buying helped the stock return to positive territory.
Without the financial sector, the main board rose only 13.13 points or 0.08 percent from a session earlier.
"Foreign institutional investors had started to rebuild their holdings in financial heavyweights in the past few sessions," Hua Nan Securities analyst Lu Chin-wei said. "The rate increase leads simply gave investors a good reason to buy, taking advantage of the relatively low valuations of these large financial stocks."
CTBC Financial Holding Co. rose 3.83 percent to close at NT$28.45. On Wednesday, foreign institutional investors registered a net buy of 20.38 million CTBC shares, the largest net buy among the companies listed on the TWSE.
In addition, Cathay Financial Holding Co. rose 4.17 percent to end at NT$67.40, Mega Financial Holding Co. gained 2.30 percent to close at NT$37.85, and Fubon Financial Holding Co. added 2.00 percent to end at NT$81.60.
According to the TWSE, foreign institutional investors bought a net NT$17.45 billion worth of shares on the main board Thursday after a net buy of NT$12.75 billion on Wednesday.
The tech sector fell into consolidation mode, up only 0.09 percent, with the semiconductor sub-index unchanged.
"TSMC moved in a narrow range today after a rally seen in the previous three sessions. But its initial losses were technical in nature as the chipmaker is riding the waves of strong global demand and its fundamentals are healthy," Lu said. "Many investors are anticipating the chipmaker will give positive leads in its investor conference this afternoon."
TSMC rose 0.15 percent to close at NT$661.00 after coming off a low of NT$655.00 after foreign institutional investors bought a net 15.12 million shares on Wednesday, the second-largest net buy.
After the market closed, TSMC announced it posted a new high of NT$166.23 billion in the fourth quarter, up 6.4 percent from a quarter earlier and also up 16.4 percent from a year earlier.
(Jan. 13: TSMC Q4 net profit hits record high as gross margin improves)
As TSMC took a pause, buying rotated to other semiconductor heavyweights with United Microelectronics Corp., a smaller contract chipmaker, up 2.26 percent to end at NT$63.30, and smartphone chip designer MediaTek Inc. up 1.38 percent to close at NT$1,100.00. But IC packaging and testing services provider ASE Technology Holding Co. lost 1.87 percent to end at NT$105.50.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.96 percent to close at NT$105.50, while Largan Precision Co., a supplier of smartphone lenses to Apple Inc., ended unchanged at NT$2,375.00 before the company held an investor conference after the market close.
Rotational buying also pushed up select raw material stocks with the steel sector in focus, dealers said.
The steel sector rose 1.87 percent with China Steel Corp., the largest steel maker in Taiwan, up 1.87 percent to close at NT$35.50, and China Steel Structure Corp. up 6.76 percent to end at NT$63.20.
Bucking the upturn, Evergreen Marine Corp., Taiwan's largest container cargo shipper, fell 1.95 percent to close at NT$126.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. lost 2.78 percent and 4.26 percent, respectively, to end at NT$105.00 and NT$168.50.
"An earnings season at home and the U.S. markets is underway and it is worth watching since the results and forecasts of the major listed firms are expected to move share prices," Lu said. "But, for the Taiex, strong technical support is expected in the event of any volatility at around 18,000 points, the 20-day moving average."
Source: Focus Taiwan News Channel