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Taiwan shares rise over 100 points in morning session

2018/02/23 11:53:40

Taipei, Feb. 23 (CNA) Taiwan shares moved more than 100 points higher in the morning session Friday as bargain hunters emerged to take advantage of relatively low valuations of local equities despite a mixed Wall Street overnight, dealers said.

The bellwether electronics sector drove the upturn of the broader market, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), pushing the weighted index past the nearest technical resistance of the 60-day moving average of 10,746 points, they said.

As of 10:57 a.m., the weighted index on the Taiwan Stock Exchange (Taiex) had gained 131.54 points, or 1.23 percent, at 10,793.92, on turnover of NT$68.61 billion (US$2.35 billion).

The market opened up only 26.59 points, reflecting a mixed U.S. market, where the Dow Jones Industrial Average closed up 0.66 percent and the tech-heavy NASDAQ index ended down 0.11 percent amid lingering concerns over the U.S. Federal Reserve's rate hike cycle, dealers said.

Momentum accelerated with large cap stocks, in particular TSMC, in focus, to vault the Taiex past the 60-day moving average, they said.

"The current gains surprised me somehow," KGI Securities analyst Phil Chu said. "The movement showed many investors remain upbeat about the local main board, expecting the index to continue playing catch-up with Wall Street's gains over the Lunar New Year holiday."

"Moreover, the strong showing of other regional markets, in particular the Seoul market, this morning also provided an indication to local investors to pick up shares," Chu said.

Chu said TSMC, the most heavily weighted stock on the local market, continues to serve as an anchor for the local equity market, although its American depositary receipts fell 1.17 percent on the U.S. market overnight.

TSMC had gained 2.30 percent to reach NT$245.00 with 11.08 million shares changing hands, as of 10:57 a.m. Led by TSMC, the bellwether electronics sector was up 1.45 percent, with shares in iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, rising 1.48 percent to NT$89.20 as the market laggard attracted buying.

Chu said old economy and financial stocks also benefited from bargaining hunting with Formosa Chemicals & Fibre Corp. up 1.88 percent at NT$108.50, and Formosa Petrochemical Corp. up 1.33 percent at NT$114.50.

In the financial sector, shares in Cathay Financial Holding Co. had gained 1.11 percent at NT$54.80, and Shin Kong Financial Holding Co. added 3.38 percent to NT$12.25 as of 10:57 a.m.

"However, turnover failed to expand in line with index point gains today since some investors remain wary of possible further volatility on Wall Street amid fears over rising interest rates," Chu said.

On Wednesday, the Fed released the minutes of its last policymaking meeting held in January, pointing to stronger than expected economic growth in the United States, which has raised worries that it could speed up its rate hike cycle this year.

"It remains to be seen whether the Taiex will stay above the 60-day moving average. It is possible that the main board could test that level soon if Wall Street turns volatile," Chu said.

(By Frances Huang)