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Taiwan shares end at highest in nearly 28 years

2018/01/19 17:37:27

Taipei, Jan. 19 (CNA) Shares in Taiwan hit a new high on Friday, reaching the highest point in almost 28 year as large cap electronics stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. and iPhone assembler Hon Hai Precision Industry Co. made a strong showing, dealers said.

While those two large cap stocks posted solid gains, many other high tech stocks as well as non-high tech stocks, especially in the petrochemical sector, remained sluggish throughout the session, they said.

The weighted index on the Taiwan Stock Exchange closed up 79.28 points, or 0.72 percent, at the day's high of 11,150.85, off an early low of 11.095.85, on turnover of NT$133.51 billion (US$4.54 billion).

Friday's closing level was the highest since April 3, 1990, when the weighted index ended at 11,119.00 points.

The market opened up 0.47 percent as investors ignored a weaker Wall Street, where the Dow Jones Industrial Average closed down 0.37 percent and the S&P 500 index ended down 0.16 percent amid lingering worries over a possible government shutdown, dealers said.

TSMC led the broader market higher on strong buying sparked by a better-than-expected outlook for 2018, and interest in Hon Hai accelerated on bargain hunting to help the broader market and offset the weakness of other tech and non-tech stocks, they said. TSMC and Hon Hai also received a boost in late session buying to push the weighted index to a day's high at the close of trading, they added.

"TSMC and Hon Hai, the two largest stocks in terms of market value in Taiwan, dominated today's trading to lift the broader market to a new high (the highest for almost 28 years)," Xincheng International Investment Consultant analyst Chang Chih-cheng said.

Shares in TSMC rose 2.82 percent to close at the day's high of NT$255.50 with 50.42 million shares changing hands after the company said at an investor conference on Thursday that its sales for 2018 are expected to grow 10-15 percent from a year earlier in U.S. dollar terms, compared with an earlier market estimate of a 5-10 percent increase. Led by TSMC, the bellwether electronics sector gained 1.46 percent and the semiconductor sub-index added 1.94 percent.

"Hon Hai benefited from its relatively low valuation so bargain hunters turned active to pick up the stock. I expect buying in Hon Hai to continue in the short term," Chang said.

Hon Hai rose 3.30 percent to close at the day's high of NT$96.90 on trading volume of 101.26 million shares.

However, many other tech stocks moved lower as most funds flocked to TSMC and Hon Hai, Chang said.

Among the falling electronics stocks, memory chipmaker Nan Ya Technology Corp. fell 1.71 percent to close at NT$80.60, United Microelectronics Corp., a smaller rival of TSMC, lost 0.70 percent to end at NT$14.20, and integrated circuit designer MediaTek Inc. ended down 0.16 percent at NT$319.00.

In the old economy sector, shares in China Steel Corp., the largest steel maker in Taiwan, fell 0.20 percent to close at NT$25.10, Formosa Plastics Corp. shed 0.99 percent to close at NT$100.50, and Nanya Plastics Corp. lost 1.38 percent to end at NT$107.50.

"Despite today's gains, I have turned cautious about the movement of the broader market in the near future," Chang said, "it is unrealistic to think TSMC and Hon Hai will move higher forever, so if other large cap stocks fail to follow the two largest ones and post gains, it is possible the weighted index will fall back soon."

According to the TWSE, foreign institutional investors bought a net NT$8.62 billion worth of shares on the main board Friday.

(By Frances Huang)