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Taiwan shares end above 10,400 points

2019/03/15 20:38:20

Taipei, March 15 (CNA) Shares in Taiwan moved higher to overcome stiff technical resistance ahead of 10,400 points as the bellwether electronics sector continued to steam ahead, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.

The old-economy sector also attracted buying as bargain hunters rushed to pick up stocks in the sector, which has lagged behind the high-tech sector as well as the broader market for some time, dealers added.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 90.59 points, or 0.88 percent, at the day's high of 10,439.24, after moving to a low of 10,370.00, on turnover of NT$152.996 billion (US$5.95 billion).

The market opened up 0.25 percent as investors shrugged off a sluggish Wall Street, where the Dow Jones Industrial Average closed up 0.03 percent and the tech heavy Nasdaq index ended down 0.16 percent overnight, dealers said.

Buying accelerated on the local main board as TSMC, the most heavily weighted local stock, moved higher to lead the semiconductor sector and the entire electronics sector to post gains, while old economy stocks in the petrochemical and textile sectors were favored by bargain hunters, pushing up the Taiex to the day's high at the end of the session, they said.

"TSMC's gains show that foreign institutional investors tend to push up the index on the spot market in a bid to profit in the futures market as they still own a large chunk of long position futures contracts," Mega International Investment Service Corp. analyst Alex Huang said.

According to Huang, foreign institutional investors own a net total of about 60,000 long position futures contracts, a high level indicating they are upbeat about the spot market.

TSMC rose 1.92 percent to close at NT$239.00 with 33.62 million shares changing hands. The upturn enjoyed by TSMC boosted the Taiex by about 45 points and lifted the electronics sector by 0.82 percent.

Among other electronics stocks, United Microelectronics Corp., a smaller rival of TSMC, added 1.75 percent to end at NT$11.65, and integrated circuit designer MediaTek Inc. gained 1.28 percent to close at NT$276.00.

"Today's turnover expanded to more than NT$150 billion so I suspect foreign institutional investors stood on the buy side," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$5.58 billion worth of shares on the main board Friday.

Huang said the non-tech sector also rode the wave of strong buying as "many old economy stocks appeared relatively cheap attracting bargain hunters."

In the textile sector, Eclat Textile Co. rose 5.13 percent to close at NT$420.50, and Makalot Industrial Co. gained 4.30 percent to end at NT$206.00.

On the back of the rebound staged by international crude oil prices, Formosa Plastics Corp. rose 1.44 percent to close at NT$105.50, and Formosa Petrochemical Corp. added 3.57 percent to end at NT$116.00.

"Despite today's gains, the main board is expected to face high technical hurdles ahead of the 240-day moving average of around 10,450 points so the room for a further upturn will be limited in the short term," Huang said.

Investors need to pay close attention to a policymaking meeting scheduled by the U.S. Federal Reserve for next week, while on-going trade talks between the United States and China are expected to continue to move global financial markets, Huang added.

(By Frances Huang)