Shares in Taiwan moved sharply higher Friday to close above the 17,500-point mark, led by large-cap contract chipmakers Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics Corp. (UMC), on the back of their product price hikes due to a global supply shortage, dealers said.
In a market awash in ample liquidity, rotational buying remained active to push up select financial and old economy stocks throughout the session to lend additional support to the broader market, they said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 197.16 points, or 1.14 percent, at 17,516.92, after moving between 17,380.52 and 17,540.78. Turnover totaled NT$361.31 billion (US$13.05 billion).
The market opened up 0.35 percent in response to the all-time highs enjoyed by the S&P 500 index and the tech-heavy Nasdaq index, and buying accelerated as TSMC and UMC kept steaming ahead, lifting the bellwether electronics sector by 1.56 percent and the semiconductor sub-index by 1.97 percent at the end of the session, dealers said.
"After yesterday's doldrums, TSMC and UMC attracted strong bargain hunting soon after the local equity market opened today," Hua Nan Securities analyst Lu Ching-wei said. "The two stocks rode the waves of higher product prices to serve as an anchor to the broader market."
TSMC, the most heavily weighted stock on the local market and the world's largest contract chipmaker, rose 2.14 percent to close at its day's high of NT$620.00, after local media reported recently that the chipmaker had raised the prices of its chips made on the advanced 7 nanometer and 5nm processes by 7-9 percent and the prices of those made on mature processes by about 20 percent.
"TSMC's gains contributed more than 100 points to the Taiex's gains today," Lu said. "But, I am afraid the stock will face technical resistance after it hit NT$620.00, even while its fundamentals remain sound."
For its part, UMC, the second-largest contract chipmaker in Taiwan, surged 9.38 percent to end at its day's high of NT$70.00 on media reports that said that more of UMC's integrated circuit design clients have been willing to sign longer contracts to secure supply.
Among other semiconductor stocks, IC packaging and testing services provider ASE Technology Holding Co. rose 2.39 percent to close at NT$128.50, but smartphone IC designer MediaTek Inc. dropped 1.50 percent to end at NT$919.00 after a Taipei-based market information advisory firm downgraded its smartphone growth forecast for this year.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.90 percent to close at NT$112.50, and PC brand Acer Inc. increased by 1.61 percent to end at NT$25.30.
"The petrochemical and textile sectors were two of the beneficiaries of a spike in international crude oil prices overnight, in addition to strong rotational buying," Lu said. Crude prices rose about 2 percent Thursday amid optimism over a global economic recovery.
The petrochemical sector rose 0.9 percent, with Formosa Plastics Corp. ending up 1.72 percent at NT$100.50, and Formosa Chemicals & Fibre Corp. rising 1.34 percent to end at NT$83.00.
In the textile sector, which rose 2.05 percent, Far Eastern New Century Corp. increased 1.35 percent to close at NT$30.00, and Eclat Textile Co grew 3.78 percent to close at NT$577.00.
In line with the broader market, the financial sector rose 1.3 percent. Among the gaining stocks, Fubon Financial Holding Co. rose 2.54 percent to close at NT$84.80, Cathay Financial Holding Co. increased by 1.53 percent to end at NT$59.60, and Mega Financial Holding Co. grew 1.40 percent to close at NT$32.55.
"The shipping industry still came under pressure as the stock exchange has tightened the monitoring of a wide swing of many major stocks," Lu said. "These stocks which drew a lot of selling sent turnover for the main board higher."
Among these, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, fell 3.09 percent to end at NT$125.50, Yang Ming Marine Transport Corp. declined 4.37 percent to close at NT$120.50, and Wan Hai Lines Ltd. shed 5.37 percent to end at NT$222.00.
"The United States is set to release its August non-farm payroll data later today," Lu said. "The global markets are closely watching how the data will go, which could dictate the U.S. Federal's monetary policy."
According to the TWSE, foreign institutional investors bought a net NT$32.49 billion worth of shares on the main board Friday.
Source: Focus Taiwan News Channel