Taiwan shares jumped more than 200 points in the mid-morning session Thursday as investors took cues from a strong showing on Wall Street to pick up bargains despite the victory scored by Donald Trump in the Nov. 8 U.S. presidential election, dealers said.
Large-cap stocks in the bellwether electronics sector boosted the broader market, led by Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, after TSMC shares suffered a more-than 3 percent plunge a session earlier amid disappointment with the U.S. vote results, the dealers said.
The financial sector also moved higher, adding momentum to the local main board after U.S. banking heavyweights soared overnight on hopes that Trump's presidency will reduce the regulatory burden on the banking sector, they added.
As of 10:08 a.m. Thursday, the weighted index on the Taiwan Stock Exchange had added 217.67 points, or 2.43 percent, at 9,160.87, on turnover of NT$35.17 billion (US$1.11 billion) after a 2.98 percent dive on Wednesday.
"Yesterday's heavy losses in Taiwan and other regional markets reflected fears of the possible adverse impact resulting from Trump's win over his Democratic Party rival Hillary Clinton," MasterLink Securities analyst Tom Tang said. "But Wall Street's positive reaction to Trump's victory prompted bargain hunters here to turn active this morning."
Tang said that in his acceptance speech, Trump changed his usual wild tone but focused on his determination to move the U.S. economy ahead by doubling the country's economic growth through massive investment in infrastructure.
"The U.S. is a mature democracy, so any president-elect is expected to act within the existing political mechanism. Trump's acceptance speech seemed to make many investors feel relieved to some extent and push up Wall Street, which rose from the day's low to close sharply higher overnight," Tang said.
On Wednesday, the Dow Jones Industrial Average rose 1.40 percent, the S&P 500 index gained 1.11 percent, and the tech-heavy NASDAQ also added 1.11 percent.
On the local main board, the electronics sector had risen 2.56 percent and the semiconductor sub-index had added 2.79 percent after TSMC, the world's largest contract chip maker, had gained 3.02 percent at NT$187.50 as of 10:08 a.m.
Also in the high-tech sector, Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., had risen 6.29 percent to NT$3,550.00, and integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) had added 2.55 percent to NT$36.30.
Among the gaining financial stocks, which were boosted by a roughly 4 percent rise posted by their counterparts on Wall Street, Fubon Financial Holding Co. (???) had risen 5.14 percent to NT$45.00 and Cathay Financial Holding Co. (???) had added 4.73 percent to NT$40.95.
"Despite the current strong comeback on the main board, investors had better remain cautious about future movement, as Trump's presidency could emphasize economic protectionism, which will affect export-oriented economies such as Taiwan," Tang said.
"We will also have to keep alert over a likely interest rate hike by the U.S. Federal Reserve in December," he added.
He said it is possible that today's upturn in the local equity market will be short-lived ahead of strong technical resistance at around 9,200 points.
Source: Focus Taiwan News Channel