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Taiwan shares end up as electronics sector gains

2017/10/19 17:22:40

Taipei, Oct. 19 (CNA) Shares in Taiwan closed higher Thursday on the back of gains posted by the bellwether electronics sector, as investors here were encouraged to pick up stocks by a higher Wall Street, where the Dow Jones Industrial Average ended above 23,000 points for the first time ever, dealers said.

Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) led the upturn amid optimism that the world's largest contract chipmaker will paint a rosy picture about the fourth quarter in an investor conference planned for after the market closed, the dealers said.

Buying in TSMC, a supplier to Apple Inc., spread to other Apple concept stocks, such as iPhone assembler Hon Hai Precision Industry Co. (鴻海) and smartphone camera lens maker Largan Precision Co.(大立光), to keep the broader market above the previous closing level into the end of the session, they added.

The weighted index on the Taiwan Stock Exchange closed up 40.01 points, or 0.37 percent, at 10,760.29, after moving between 10,745.77 and 10,798.54, on turnover of NT$118.82 billion (US$3.93 billion).

The latest closing level continued to hit a high not seen since April 4, 1990, when the weighted index ended at 10,907.09.

The market opened up 0.24 percent in a knee-jerk reaction to the gains seen on Wall Street, where the tech-heavy NASDAQ index and the S&P 500 index also closed at record highs on Wednesday, which led buying here to feature electronics stocks, including TSMC, the dealers said.

While interest was also seen in other market heavyweights such as Hon Hai, Largan benefitted from late-session buying to make the electronics sector a dominant force in the strength of the broader market, they said.

"The electronics sector accounted for about 70 percent, serving as an anchor to the main board throughout the session," Concord Securities analyst Kerry Huang said. "The sector helped the broader market move closer to the 10,800-point level, with market sentiment improving a lot as investors saw a stronger Wall Street."

"Thanks to TSMC, the weighted index emerged from the doldrums seen in the previous two sessions and I expect further gains are possible," Huang said. While coming off an early high of NT$241.50, TSMC rose 0.63 percent to close at NT$239.00, with 23.41 million shares changing hands before the investor conference opened later in the day.

In the meeting, TSMC announced that its net profit for the third quarter rose more than 35 percent from a quarter earlier to NT$89.93 billion after its consolidated sales topped its earlier sales guidance. Investors have been waiting for TSMC's forecast on its operations for the fourth quarter.

Also in the electronics sector, Hon Hai, second to TSMC in terms of market capitalization, rose 1.35 percent to close at NT$113.00, while Largan, the most expensive stock in Taiwan, benefited from bargain hunting in the late trading session, up 2.68 percent to end at NT$5,745.00.

However, the non-high-tech sector remained slow, as most of the buying featured electronics stocks, Huang said.

Among the mixed old-economy stocks, food brand Uni-President Enterprises Corp. (統一) fell 0.62 percent to close at NT$63.70, while Eclat Textile Co. (儒鴻) rose 0.40 percent to end at NT$375.50.

In the financial sector, Fubon Financial Holding Co. (富邦金) fell 0.21 percent to close at NT$47.20, while Cathay Financial Holding Co. (國泰金) gained 0.41 percent to end at NT$49.35.

"Investors had better pay close attention to the ongoing earnings season at home and on Wall Street over the next few weeks, which could affect foreign institutional investors' trading strategies and eventually affect share prices," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$5.63 billion-worth of shares on the main board Thursday.

(By Frances Huang)