Taiwan shares staged a rebound during Monday’s morning session after U.S. jobs data missed market expectations, which reduced fears of a rate hike by the U.S. Federal Reserve, dealers said.
Buying focused on large-cap stocks in both the electronics and non-high tech sectors, led by Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local equity market, to push up the weighted index by more than 1 percent, they said.
However, with the weighted index moving closer to the nearest technical resistance level of 9,100 points, the upturn on the local main board seemed to be capped for the moment, they added.
As of 10:50 a.m., the weighted index on the Taiwan Stock Exchange had risen 96.25 points, or 1.07 percent, to 9,083.80, off an early high of 9,092.69, on turnover of NT$32.22 billion (US1.02 billion).
“The worse than expected non-farm payroll data in the U.S. prompted investors at home and abroad to think that the chances the Fed will raise its key interest rates in September are slim,” Hua Nan Securities analyst Henry Miao said.
On Friday, Washington reported the August non-farm payrolls which pointed to an increase of only 151,000 new jobs in the month, far below market expectations of a 180,000 rise. The August job report had been watched closely by the global financial market for a clue on the Fed’s next move ahead of the U.S. central bank’s policymaking meeting scheduled for Sept. 20-21.
Miao said that since the U.S. will hold a presidential election in November, it is unlikely that the Fed will tighten its monetary policy until a policymaking meeting scheduled for December.
“The eased concerns over an immediate rate hike by the Fed led investors to resume buying soon after the local market opened today,” Miao said. “Look at the gains posted by large-cap stocks. I think foreign institutional investors are standing on the buy side.”
As of 10:50 a.m., the bellwether electronics sector had gained 1.26 percent after TSMC, the world’s largest contract chip maker, rose 1.43 percent to NT$177.00 with 11.05 million shares changing hands.
Also in the high tech sector, integrated circuit designer MediaTek Inc. (???) had added 2.65 percent to NT$252.00, and Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads for Apple Inc., had gained 1.04 percent to NT$78.00.
In the old economy sector, Formosa Plastics Corp. had risen 0.77 percent to NT$78.60 and Nan Ya Plastics Corp. had added 1.00 percent to NT$60.90.
Among the financial stocks, Fubon Financial Holding Co. (???) had risen 1.01 percent to NT$45.00, and Cathay Financial Holding Co. (???) had risen 1.27 percent to NT$39.95.
“The current buying showed many investors rushed to pick up bargains after the local equity market fell last week,” Miao said. The weighted index fell 1.58 percent last week as investors had been wary of a possible rate hike by the Fed.
“But, since stiff technical resistance remains in place ahead of 9,100 points, the gains have been limited as some investors are reluctant to chase prices for the moment,” Miao said. He predicted that turnover could remain thin on Monday.
Source: Focus Taiwan News Channel