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Taiwan shares soar, led by TSMC

2018/02/23 16:47:42

Taipei, Feb. 23 (CNA) Shares in Taiwan moved sharply higher to close at almost the day's high, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, led the broader market to post more than 100 points, dealers said.

Turnover remained moderate, failing to expand in line with the market's point gains, as many investors remained reluctant to chase prices for the moment amid continued concerns over further volatility on Wall Street, which has been bothered by a possible faster pace on the part of the U.S. Federal Reserve to raise its key interest rates, the dealers said.

The weighted index on the Taiwan Stock Exchange (Taiex) ended up 132.17 points, or 1.24 percent, at 10,794.55, after moving between 10,688.97 and 10,799.29, on turnover of NT$123.43 billion (US$4.21 billion).

The buying vaulted the closing level past the 60-day moving average of 10,746 points, the nearest technical resistance for the main board.

The market opened up 0.25 percent on a technical rebound despite a mixed Wall Street, where the Dow Jones Industrial Average closed up 0.66 percent and the tech-heavy NASDAQ index ended down 0.11 percent overnight, the dealers said.

With buying in large-cap stocks, in particular TSMC, momentum on the broader market continued to push up the Taiex by more than 100 points in the early morning session, and the strength continued into the end of the session and appeared even more obvious during the trading session, they said.

"Thanks to TSMC, the local main emerged from the doldrums seen a day earlier," Mega International Investment Services Corp. analyst Alex Huang said. "The buying in the world's largest contract chipmaker showed investors' confidence in its business outlook."

TSMC rose 2.30 percent to close at the day's high of NT$245.00 with 26.86 million shares changing hands. Led by TSMC, the bellwether electronics sector ended up 1.42 percent and the semiconductor sub-index closed up 1.73 percent.

TSMC, which accounts for more than 50 percent of the world's contract chip production market, has forecast that its sales for 2018 will grow 10 percent-15 percent from a year earlier in U.S. dollar terms, beating a 5 percent-10 percent increase anticipated for the entire semiconductor industry worldwide.

"As a leader in the global wafer foundry business, it is unlikely that TSMC's position will be swayed any time soon," Huang said.

Also in the high-tech sector, iPhone assembler Hon Hai Precision Industry Co. added 1.14 percent to close at the day's high of NT$88.90, and Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 2.73 percent to end at NT$3,950.00.

Buying spread to non-high-tech stocks, with Formosa Plastics Corp. up 1.46 percent to close at the day's high of NT$104.00, and Formosa Chemicals and Fiber Corp. up 2.35 percent to end at the day's high of NT$109.00.

Among other gaining non-high-tech stocks, Formosa Petrochemical Corp. rose 2.21 percent to close at the day's high of NT$115.50, and Taiwan Pulp and Paper Corp. also ended at the day's high of NT$18.70, up 3.03 percent.

"Today's turnover failed to expand, with many investors staying on the sidelines, watching closely whether Wall Street will stabilize from recent volatility," Huang said.

"Market sentiment at home and abroad remains haunted by fears that the Fed will raise its key interest rates more than three times this year at a time of a strong economic recovery in the U.S.," Huang said.

Huang also urged investors to watch the movement of the U.S. dollar on expectations of higher U.S. interest rates, saying that a stronger greenback could drive foreign institutional investors to move funds out of the region.

According to the TWSE, foreign institutional investors bought a net NT$2.12 billion-worth of shares on the main board Friday.

(By Frances Huang)