Taiwan shares jumped more than 200 points Monday morning as the bellwether electronics sector rebounded strongly from a slump last week, dealers said.
Among the gaining high-tech stocks, Taiwanese suppliers to Apple Inc. led the upturn as investors took cues from an 11 percent increase in the share price of the U.S. consumer electronics giant last week, they said.
Market sentiment also improved on the back of a higher Taiwan dollar, which indicated that foreign investors were moving funds into the country again as an imminent interest rate hike by the U.S. Federal Reserve seemed unlikely, dealers said.
As of 10:53 a.m., the weighted index on the Taiwan Stock Exchange had risen 206.48 points, or 2.32 percent, to 9,108.78 on turnover of NT$49.68 billion (US$1.57 billion) after a 1.67 percent drop last week.
"The strong showing of Apple shares in the past week motivated many investors here to chase prices among the local Apple concept stocks as the latest iPhones received a warm reception in pre-order sales and the first round of global sales," MasterLink Securities analyst Tom Tang said.
Apple's 11 percent increase was the strongest weekly gain by the stock since October 2011. The solid gains came after T-Mobile, a major telecom service provider in the United States, said that iPhone 7 preorders were at record levels, almost four times higher than in 2014 when the iPhone 6 was released.
Since the first round of the global sales of the new iPhones started on Friday, some models have already sold out, Apple said. Market sources said a backlog of orders for the jet black iPhones, the most popular version, will last into November.
"Taiwan's market was closed Thursday and Friday for the Mid-Autumn Festival holiday so investors scrambled onto the trading floor today to catch up on the buying in Apple's Taiwanese suppliers," Tang said.
Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, which supplies the A10 processor for the new iPhones, had gained 4.32 percent to NT$181.00 with 30.87 million shares changing hands, as of 10:53 a.m.
Among other Apple suppliers, smartphone camera lens maker Largan Precision Co. (???) had climbed 5.70 percent to NT$3,800.00, metal casing producer Catcher Technology Co. (??) was up 4.96 percent at NT$264.90, and Hon Hai Precision Industry Co., an assembler of iPhones and iPads, had gained 2.84 percent to reach NT$79.60.
Led by these large-cap stocks, the bellwether electronics sector had added 3.03 percent.
"Turnover for now appears heavy," Tang said. "It seems that foreign institutional investors are behind the current buying. A rising Taiwan dollar showed that foreign investors are bringing in funds again as the chances of a rate hike by the Fed in September seem small."
The Fed is scheduled to hold a policymaking meeting on Sept. 20-21. According to the CME Group's FedWatch tool, market expectations for a September rate hike rose from 12 percent to 15 percent, but the possibility remained relatively slim, dealers said.
Source: Focus Taiwan News Channel