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Taiwan shares end above 10,900 points, led by tech heavyweights

2018/05/21 17:23:52

Taipei, May 21 (CNA) Shares in Taiwan rose sharply to close above the 10,900-point mark Monday as fears of a trade war between the United States and China eased after they agreed to continue bilateral trade talks but not impose tariffs on each other's products.

The bellwether electronics sector bolstered the broader market as buying focused on major suppliers to Apple Inc., such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., dealers said.

Turnover remained moderate, however, as investors were still wondering what kind of an agreement Washington and Beijing might strike and were also afraid of a possible major pullback as the market moved closer to 11,000 points, they said.

The weighted index (Taiex) on the Taiwan Stock Exchange ended up 135.36 points, or 1.25 percent, at 10,966.20, after moving between 10,861.66 and 10,979.10. Turnover was NT$125.23 billion (US$4.18 billion).

The market opened up 0.28 percent on a technical rebound from losses seen the previous few sessions in response to a joint statement issued by the U.S. and China on Saturday saying they had agreed to put trade tariffs on hold after their latest round of talks over the weekend, dealers said.

In an interview with Fox News on Sunday, U.S. Treasury Secretary Steven Mnuchin said China and the U.S. were "putting the trade war on hold" after Beijing agreed to a "significant increase" in purchases of products from the U.S. to cut a trade imbalance.

Buying on the Taiwan market accelerated with TSMC, Hon Hai and other Apple concept stocks in focus to push the Taiex above the 10,900-point mark, and the momentum continued to the end of the session, dealers said.

"After the market consolidated in the past few sessions, investors seized on developments between the U.S. and China to take advantage of recent losses suffered by large cap tech stocks, especially in the Apple supply chain," Concord Securities analyst Kerry Huang said.

TSMC, the most heavily weighted stock in the local market, rose NT$5.50, or 2.46 percent, to close at NT$229.00, with 16.10 million shares changing hands.

The gains posted by TSMC alone contributed about 55 points to the Taiex's increase.

Led by TSMC, the electronics sector rose 1.85 percent and the semiconductor sub-index gained 1.92 percent.

Among other Apple suppliers, Hon Hai, second to TSMC in terms of market value, gained 1.31 percent to close at NT$85.00, and Largan Precision Co., a smartphone camera lens maker, added 0.95 percent to end at NT$4,040.00.

"Buying also spread to select old economy stocks because of rising international crude oil prices," Huang said.

"The financial sector also got a boost from bargain hunting to push the Taiex even higher."

In the petrochemical sector, Formosa Petrochemical Corp. rose 1.21 percent to close at NT$125.50, and Formosa Plastics Corp. added 0.45 percent to end at NT$112.50.

The financial sector closed up 0.68 percent, with Cathay Financial Holding Co. up 1.10 percent to end at NT$55.00 and Mega Financial Holding Co. up 1.12 percent to close at NT$27.00.

"Despite the gains in the index, turnover remained moderate, indicating that many investors were still waiting for an agreement finalized by the U.S. and China," Huang said. "Before the details come out, many of them preferred to stay on the sidelines."

Huang said that with stiff technical resistance ahead of 11,000 points, trading volume needs to expand to NT$135 billion or higher for the main board to clear the hurdle.

(By Frances Huang)