Taiwan shares soar, led by tech stocks, after Wall Street rally

Taipei, Shares in Taiwan moved sharply higher on Tuesday, closing up more than 140 points in reaction to a strong showing on Wall Street overnight, dealers said.

The bellwether electronics sector, which was boosted by tech stocks in U.S. markets, drove the broader market, with Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, leading the way, they said.

Turnover remained moderate and failed to expand in line with the benchmark index's gains, however, as many investors stayed on the sidelines waiting to see when Wall Street will stabilize and foreign investors will resume heavy buying of Taiwan stocks, dealers said.

The weighted index on the Taiwan Stock Exchange, the Taiex, closed up 141.44 points, or 1.33 percent, at the day's high of 10,784.34, off an early low of 10,711.15, on turnover of NT$110.78 billion (US$3.78 billion).

The market opened up 0.64 percent and continued to pick up momentum, led by the electronics sector, after a 1.37 percent rise in the Dow Jones Industrial Average and a 1 percent rise in the tech-heavy Nasdaq in the United States on Monday, dealers said.

The strong gains in the U.S. indicated that fears of an imminent trade war sparked by Washington's plans to impose a 25 percent tariff on imported steel and a 10 percent tariff on imported aluminum were easing, dealers said.

Investors' attitudes changed after U.S. President Donald Trump tweeted, "Tariffs on steel and aluminum will only come off if new & fair NAFTA (North American Free Trade Agreement) agreement is signed."

That led them to interpret the measures as simply a way to force Canada and Mexico to sign a fair trade agreement.

"The local equity market just followed Wall Street in staging a rebound," Mega International Investment Services Corp. analyst Alex Huang said. "The electronics sector, with a strong TSMC, continued to serve as the market's driving force today."

TSMC, the most heavily weighted stock in the local market, rose 3.52 percent to close at the day's high of NT$250.00, with 34.86 million shares changing hands, after its American depositary receipts rose 1.12 percent overnight.

Led by TSMC, the bellwether electronics sector rose 1.91 percent and the semiconductor sub-index ended up 3.00 percent, dominating the market.

Also in the high-tech sector, bargain hunters rushed to pick up iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, which gained 1.38 percent to end at NT$88.20.

"The stock has lagged behind the broader market for some time," Huang said.

Integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. rose 2.75 percent to close at NT$41.10, and IC designer MediaTek Inc. added 2.03 percent to end at NT$301.00.

Petrochemical stocks were boosted by higher international crude oil prices on Monday. Nan Ya Plastics Corp. closed 1.54 percent higher at NT$79.30, and Formosa Petrochemical Corp. finished up 2.24 percent at NT$114.00.

In the financial sector, which gained 0.64 percent, lagging behind the broader market, Fubon Financial Holding Co. rose 0.40 percent to close at NT$50.30, E. Sun Financial Holding Co. added 0.78 percent to end at NT$19.35, and CTBC Financial Holding Co. gained 0.93 percent to close at NT$21.70.

"The moderate trading volume means there weren't many investors willing to chase prices for the time being," Huang said.

"Investors here wanted to know what foreign institutional investors are thinking and when they will start buying aggressively again amid uncertainty over how Wall Street will move."

According to the TWSE, foreign institutional investors bought a net NT$3.73 billion in shares on the exchange Tuesday after a net sell of NT$10.21 billion in shares a session earlier.

Source: Focus Taiwan News Channel