Shares in Taiwan bounced back Wednesday from a recent slump though market sentiment remained affected by the military conflict between Russia and Ukraine, dealers said.
Bargain hunting took place across the board especially in the bellwether electronics sector and old economy stocks, in particular in the shipping and steel industries, which pushed the local main board back above the 17,000-point mark, dealers added.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 190.11 points, or 1.13 percent, at 17,015.36, after moving between 16,944.08 and 17,072.74. Turnover totaled NT$316.11 billion (US$11.13 billion).
Tech-led rally
The market opened up 0.71 percent led by semiconductor stocks as investors took cues from a 1.87-percent rebound on the Philadelphia Semiconductor Index but ignored a 0.56-percent decline on the Dow Jones Industrial Average overnight, dealers said.
Buying on the local main board then accelerated as it spread to the non-tech sector throughout the session with bargain hunters taking advantage of a 6.18-percent drop in the previous three daily sessions, dealers added.
"Today's gains were technical in nature as there have been no signs that the war waged by Russia against Ukraine will end anytime soon. Uncertainty over the ongoing geopolitical tensions continued to weigh on market sentiment," MasterLink Securities analyst Tom Tang said.
U.S. President Joe Biden announced overnight a ban on oil and gas imports from Russia, a move which sent international crude oil prices higher by 3.6 percent in the New York market and 3.9 percent in London.
"Political conflicts have led to economic consequences as a spike in crude prices is pushing up the already high inflationary pressure worldwide, prompting many investors to expect the U.S. Federal to speed up the pace in tightening its monetary policy," Tang said.
"Fears over an economic impact made many investors reluctant to chase prices so turnover remained moderate today despite today's gains in the Taiex," Tang said.
Chipmakers
In the wake of a rebound staged by semiconductor stocks on the U.S. market Tuesday, the local semiconductor sub-index closed up 1.00 percent, while the electronics index ended up 1.02 percent at 769.52, off a high of 800.99.
Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) was one of the semiconductor heavyweights which saw its earlier gains eroded, closing up 0.89 percent at NT$568.00 after coming off a high of NT$573.00 during the day.
Among other large-cap semiconductor stocks, United Microelectronics Corp., a smaller contract chipmaker, gained 4.23 percent to end at NT$51.80, while smartphone IC designer MediaTek Inc. underperformed the broader market, rising by only 0.31 percent to close at NT$966.00, down from a high of NT$976.00. In addition, application-specific IC (ASIC) designer Alchip Technologies Ltd. fell by 4.56 percent to end at NT$983.00.
New Apple products
Although Apple Inc. unveiled the third-generation iPhone SE and the fifth-generation iPad Air overnight, "Apple concept stocks" in Taiwan appeared mixed. Smartphone camera lens supplier Largan Precision Co. fell by 0.25 percent to close at NT$1,980.00, but rival Genius Electronic Optical Co. rose by 1.32 percent to end at NT$421.50.
In addition, iPhone assembler Hon Hai Precision Industry Co. closed unchanged at NT$101.50, while Wistron Corp., a smaller iPhone assembler, declined by 0.52 percent to end at NT$28.80.
"While many foreign institutional investors have become very cautious amid global volatility, major local market players remain willing to pick up shipping and steel stocks," Tang said.
Shipping and steel
Amid high hopes regarding their generous cash dividend payout policies, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose by 6.12 percent to close at NT$156.00, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. rose by 6.36 percent and 2.05 percent, respectively, to end at NT$125.50 and NT$174.00.
Riding the waves of higher raw material prices, China Steel Corp., Taiwan's largest steel supplier, rose by 1.47 percent to close at NT$37.95, and Tung Ho Steel Enterprise Corp. increased by 2.17 percent to end at NT$70.70. Skyrocketing crude prices boosted Formosa Plastics Corp. and Nan Ya Plastics Corp. by 1.44 percent and 1.62 percent, respectively, to close at NT$105.50 and NT$88.00.
"After a plunge in recent sessions, the Taiex has entered a downtrend technically and today's rebound is unlikely to change the trend," Tang said. "As long as the global markets remain choppy, it is possible the local main board will remain under pressure despite today's rebound."
Foreign institutional investors sold a net NT$31.82 billion worth of shares Wednesday after a net sell of NT$46.12 billion Tuesday, according to the TWSE.
Source: Focus Taiwan News Channel