Shares in Taiwan bounced back by more than 150 points Thursday, edging past the 17,000-point mark, with buying sparked by a rally on the United States markets overnight, dealers said.
Turnover was low, however, as many investors stayed on the sidelines, remaining cautious about the movement of the U.S. markets, after the U.S. Federal Reserve hinted Wednesday that it may start reducing its bond-buying stimulus soon and raise interest rates in 2022, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 152.40 points, or 0.90 percent, at 17,078.22, after moving between 16,998.07 and 17,145.25. Turnover totaled NT$250.89 billion (US$9.03 billion).
The market opened up 0.43 percent and soon moved to the day's high, following gains on the U.S. markets, where the Dow Jones Industrial Average rose 1 percent from its recent slump, as concerns eased over the possibility that a massive debt default by Chinese property developer Evergrande would trigger a financial crisis, dealers said.
Buying on the Taiwan main board was seen across most sectors, but the gains were limited, as large-cap tech stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) came off their highs by the end of the session, dealers added.
"The U.S. markets rebounded after their heavy losses in recent sessions, which were triggered by worry over the Evergrande issue," MasterLink Securities analyst Tom Tang said. "Many investors here seemed reluctant to chase prices today, however, amid uncertainty about the stability of the U.S. markets."
In addition, he said, investors are keeping an eye on the effects of the Fed's apparent intention to reduce its bond-buying stimulus, which is seen likely to start by the end of the year.
"With many investors remaining on the sidelines today, trading was light on the Taiwan main board," Tang said. "Amid the low turnover, many market heavyweights such as TSMC failed to make a breakthrough."
TSMC, the most heavily weighted stock on the local market, rose 0.34 percent to close at NT$588.00, after coming off a high of NT$593.00. With TSMC's gains capped, the index of the bellwether electronics sector came off a high of 810.01 to end at 805.44, up 0.73 percent.
Among other semiconductor stocks that failed to maintain their earlier highs, contract chipmaker United Microelectronics Corp. gained 0.93 percent to close at NT$65.20, integrated circuit designer MediaTek Inc. added 0.44 percent to end at NT$915.00, and IC packaging and testing services provider ASE Technology Holding Co. closed up 0.43 percent at NT$116.00.
Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., rose 2.60 percent to end at NT$2,370.00, while iPhone assembler Hon Hai Precision Industry Co. fell 0.50 percent to close at NT$106.50.
"Old economy stocks largely moved in line with the broader market, but their rebound was also capped amid light trading," Tang said.
He said it seems that investors have been discouraged by the government's increased oversight of day trading, a practice in which investors can buy and sell the same stock in a single session.
Among the shipping stocks that were once favored by day traders, container cargo shipper Yang Ming Marine Transport Corp. rose 1.67 percent to close at NT$121.50, Evergreen Marine Corp. gained 2.00 percent to end at NT$127.50, and Wan Hai Lines Ltd. finished up 2.22 percent at NT$207.50.
The petrochemical sector, boosted by an increase in international crude oil prices overnight, rose 1.54 percent. Formosa Plastics Corp. gained 2.50 percent to close at NT$102.50, and Nan Ya Plastics Corp. and Formosa Petrochemical Corp. each gained 1.83 percent to end at NT$88.90 and NT$94.50, respectively.
The steel sector, meanwhile, underperformed the broader market, ending down 0.05 percent, with China Steel Corp., the largest steel maker in Taiwan, closing 0.41 percent lower at NT$36.15, and China Steel Structure Corp. falling 1.94 percent to end at NT$60.60.
"We have to keep a close eye on large purchases of local stocks by foreign institutional investors, amid lingering worry over volatility on the U.S. markets," Tang said.
According to the TWSE, foreign institutional investors bought a net NT$3.59 billion worth of shares on the main board Thursday.
Source: Focus Taiwan News Channel