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Taiwan shares rebound, end above 9,700 points

2018/12/11 18:07:51

Taipei, Dec. 11 (CNA) Shares in Taiwan staged a technical rebound Tuesday from a more-than 1 percent plunge a session earlier as bargain hunters took cues from a rise on Wall Street, where the Dow Jones Industrial Average recovered from an earlier 500-point dive to close higher overnight, dealers said.

The bellwether electronics sector led the rebound on the back of gains posted by tech giants in the U.S. market, in particular Apple Inc., which boosted shares of Taiwanese suppliers to the American consumer electronics giant, the dealers said.

However, turnover remained thin as many investors were reluctant to chase prices amid concerns over trade tension between the United States and China and uncertainty over Brexit, they added.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 59.50 points, or 0.62 percent, at 9,707.04, after moving between 9,661.72 and 9,720.96, on turnover of NT$91.996 billion (US$2.98 billion).

The market opened up 0.15 percent in a knee-jerk reaction to the gains posted by the U.S. markets, where the Dow closed up 0.14 percent after rebounding from a 500-point drop, and the tech-heavy Nasdaq index ended up 0.74 percent, the dealers said.

Buying in the electronics sector continued, in particular in major suppliers to Apple, whose shares closed up 0.65 percent, even though a court in China imposed a ban on the sale and import of earlier iPhone models in a decision in favor of Qualcomm, which accused Apple of patent infringement, they said. In addition to Apple, Facebook and Amazon rose 3.2 percent and 0.73 percent, respectively.

"The gains posted by tech stocks in the U.S. market prompted investors here to pick up tech counterparts in Taiwan today," Mega International Investment Services Corp. analyst Alex Huang said.

"But the gains on Wall Street and in the local market were technical in nature and bargain hunters rushed to buy for short-term plays as there are no signs that Washington and China will resolve their trade dispute anytime soon," Huang said.

Huang said investors should watch closely how the talks between the top two economies will proceed before a March 1 deadline.

Among the gaining electronics stocks, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, rose 1.60 percent to close at NT$222.50, with 27.38 million shares changing hands.

Led by TSMC, the bellwether electronics sector closed up 1.08 percent and the semiconductor sub-index ended up 1.26 percent, serving as a driver to the upturn on the broader market.

In addition to TSMC, other Apple concept heavyweights also moved higher, with smartphone camera lens supplier Largan Precision Co. up 3.93 percent to close at NT$3,175.00, and metal casing maker Casetek Holdings Ltd. up 3.00 percent to end at NT$37.75.

iPhone assembler Hon Hai Precision Industry Co. bounced back from a day earlier, when the stock dipped to a more-than seven-year low, rising 1.03 percent to NT$68.40 after the company reported better-than- expected sales for November.

While market attention largely focused on the electronics sector, non-tech stocks appeared mixed throughout the session, the dealers said.

After international crude oil prices plunged 3 percent overnight, Formosa Plastics Corp. fell 1.01 percent to close at NT$98.50, and Formosa Petrochemical Corp. lost 0.88 percent to end at NT$112.00.

Far Eastern New Century Corp. closed unchanged at NT$28.65, while food brand Uni-President Enterprises Corp. rose 1.03 percent to end at NT$68.90.

"In addition to the U.S.-China trade issue, investors had better keep alert over the development of Brexit, which could send ripples through global financial markets," Huang said.

Despite the gains in the Taiex Tuesday, foreign institutional investors still sold a net NT$5.08 billion-worth of shares on the main board, according to the TWSE.

(By Frances Huang)