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Taiwan shares soar to end above 10,700 points

2018/02/21 16:49:31

CNA file photo

Taipei, Feb. 21 (CNA) Shares in Taiwan moved sharply higher by almost 3 percent Wednesday, the first trading session after the Lunar New Year holiday, on catch-up play with a rally on Wall Street over the holiday, dealers said.

The bellwether electronics sector, along with large cap stocks in the old economy and financial sectors, served as a driver to the significant upturn, pushing the broader market above the 10,700- point mark at the close, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE) ended up 293.35 points, or 2.81 percent, at 10,714.44, after moving between 10,559.79 and 10,720.48, on turnover of NT$145.13 billion (US$4.97 billion).

The market opened up 1.33 percent as buying was sparked by a 3.6 percent increase posted by the Dow Jones Industrial Average and a 1.4 percent rise recorded by the tech-heavy NASDAQ index during the Lunar New Year holiday, the dealers said.

Momentum continued, with heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), steaming ahead to push up the broader market by almost 300 points to pass 10,700 at the end of the session, the dealers said.

"It was a good beginning of the Year of the Dog, as investors here were encouraged by a rally in the U.S. market during the Lunar New Year holiday," Concord Securities analyst Kerry Huang said. "It was no surprise that the local equity market was playing catch-up and buying accelerated into the end of the session."

The electronics sector, which ended up 2.94 percent, remained the mainstream sector to push up the broader market, Huang said, adding that the sector accounted for about 65 percent of Wednesday's turnover.

TSMC, the most heavily weighted stock in the local market, gained 2.54 percent to close at NT$242.50, with 71.47 million shares changing hands. Led by TSMC, the semiconductor sub-index ended up 3.13 percent.

Also in the high-tech sector, integrated circuit designer MediaTek Inc. added 6.84 percent to end at NT$304.50, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 7.34 percent to close at NT$3,950.00. However, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, underperformed the broader market, rising only 0.68 percent to end at NT$88.20, as its Hong Kong listed subsidiary FIH Mobile Ltd. issued a profit warning that it could report a loss for 2017.

Huang said old economy stocks, in particular in the petrochemical sector, benefited from the latest catch-up play, with Formosa Plastics Corp. up 2.97 percent to close at NT$104.00, and Formosa Petrochemical Corp. up 3.59 percent to end at NT$115.50.

In the financial sector, which closed up 1.8 percent, Cathay Financial Holding Co. rose 1.89 percent to end at NT$54.00, and Mega Financial Holding Co. gained 2.28 percent to end at NT$24.70.

"While the Dow staged a rally during Taiwan's holiday as a whole, the Dow fell overnight, so there are concerns as to when the U.S. market will turn really stable after recent volatility," Huang said.

"More important, fears over rising interest rates in the U.S. market still bother local market sentiment," Huang said. "I think the local main board will see strong technical resistance ahead of the 60-day moving average at around 10,748 points after today's gains."

According to the TWSE, foreign institutional investors bought a net NT$9.21 billion-worth of shares on the main board Wednesday.

(By Frances Huang)