Taipei: Shares in Taiwan staged a significant technical rebound, soaring more than 400 points Thursday led by the electronics sector, as buying was triggered by a U.S. rally following a Federal Reserve decision described by the market as dovish, dealers said. The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 416.43 points, or 1.90 percent, at the day's high of 22,377.26, coming off a low of 22,171.00. Turnover totaled NT$270.13 billion (US$8.18 billion), compared with NT$316.99 billion seen Wednesday.
According to Focus Taiwan, investors appeared pleased with the Fed's decision to slow its pace in quantitative tightening, although the American central bank left interest rates unchanged this time. This sentiment was reflected in the 0.92 percent increase on the Dow Jones Industrial Average and a 1.41 percent rise on the tech-heavy Nasdaq index overnight.
The Fed's latest policymaking meeting released a dot plot indicating individual members' expectations for rates and hinted that the bank will cut rates twice this year. This led investors to seize the U.S. gains and hunt for bargains, particularly focusing on the electronics sector.
The electronics index rose 2.46 percent, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which rose 3.47 percent to close at NT$985.00, contributing about 265 points to the Taiex's rise. Other notable gains in the sector included ASE Technology Holding Co., which gained 2.85 percent to end at NT$162.50, and MediaTek Inc., which added 1.37 percent to close at NT$1,485.00.
Artificial intelligence-related stocks also bounced back from a recent slump. Hon Hai Precision Industry Co., second in market value to TSMC, ended up 1.22 percent at NT$166.00. Quanta Computer Inc. rose 1.38 percent to close at NT$257.00, and Giga-Byte Technology Co. ended up 1.52 percent at NT$268.00.
Despite broad buying, gains posted by nontech stocks were largely capped. The construction index rose 1.36 percent, with Kindom Development Co. up 2.50 percent to close at NT$57.40 and Shining Building Business Co. up 2.44 percent to end at NT$10.50.
Higher international crude oil prices contributed to gains in the plastics sector, with Formosa Plastics Corp. rising 1.62 percent to close at NT$40.80 and Nan Ya Plastics Corp. gaining 1.32 percent to end at NT$34.55.
In the financial sector, which rose 0.42 percent, Fubon Financial Holding Co. climbed 1.01 percent to close at NT$89.90, and Cathay Financial Holding Co. ended up 0.92 percent at NT$65.90.
Despite the gains, turnover was reduced, indicating that many investors remained wary of uncertainties posed by the Trump administration's tariff actions. Without expanded turnover, the Taiex could continue to move in consolidation mode.
According to the TWSE, foreign institutional investors bought a net NT$21.83 billion worth of shares on the main board Thursday.