Taipei, Taiwan shares rebounded strongly Monday morning, rising more than 100 points as political uncertainty faded in the wake of the Nov. 24 local government elections, dealers said.
The bellwether electronics sector, some old economy stocks, and in particular the tourism sector were driving the gains on the broader market, dealers said.
As of 10:35 a.m., the weighted index on the Taiwan Stock Exchange (Taiex) had climbed 118.48 points, or 1.23 percent, to 9,785.78, off an early high of 9,847.35. Turnover was NT$45.77 billion (US$1.48 billion).
The electronics sector was up 1.65 percent, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), a supplier to Apple Inc., rising 2.06 percent to NT$223.00 on trading volume of 12.34 million shares.
Among other Taiwanese suppliers to Apple, smartphone camera lens maker Largan Precision Co. had climbed 2.72 percent to NT$3,400.00, and iPhone assembler Hon Hai Precision Industry Co. was up 1.71 percent at NT$71.20.
"The buying this morning indicated that investors are now more willing to pick up stocks that had been in consolidation for some time," Hua Nan Securities analyst Kevin Su said. "The gains were sparked by the end of the political uncertainty after the elections."
In Saturday's elections, the ruling Democratic Progressive Party (DPP) suffered a crushing defeat, taking only six of the 22 city and county seats nationwide, while the opposition Kuomintang (KMT) won 15. The DPP lost more than half of the 13 seats it had held prior to the elections, while the KMT gained nine.
"The election results raised hopes that with the KMT's victory, cross-Taiwan Strait ties would improve, which would boost Taiwan's tourism industry and its wider economy," Su said.
Kaohsiung Mayor-elect Han Kuo-yu (???) of the KMT promised during his campaign to devise ways of improving ties with China to increase tourist arrivals from across the strait.
Han also said he would seek to increase Kaohsiung's exports to China.
On Monday morning, stocks of Leofoo Development Co., a major hotel chain operator in Taiwan, were up by the daily maximum 10 percent at NT$6.17, while Ambassador Hotel had climbed 7.27 percent to NT$24.35.
"However, the gains were capped as market sentiment remained bothered by the trade friction between the United States and China," Su said. "Many investors fear that the trade disputes will drag down global demand and slow the pace of economic growth."
He said the nearest technical resistance is ahead of 9,800 points.
Source: Focus Taiwan News Channel