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Taiwan shares end above 10,500 points

2019/03/18 17:21:47

Taipei, March 18 (CNA) Shares in Taiwan extended their momentum Monday from the previous session, clearing the stiff technical hurdles ahead of 10,500 points, as investors were encouraged by the gains in the United States markets, dealers said.

The bellwether electronics sector continued to steam ahead, led by large cap tech stocks, while bargain hunters bought into financial stocks, which helped push the broader market to the day's high by the end of the session, dealers said.

The weighted index on the Taiwan Stock Exchange (Taiex) closed up 73.46 points, or 0.70 percent, at 10,512.70, after coming off the day's low of 10,445.74. Turnover totaled NT$115.80 billion (US$3.75 billion) during the session and market closed at its highest since Oct. 5, 2018, when it ended at 10,517.12.

The market opened up 0.15 percent on follow-though buying from Friday, as investors remained upbeat about a possible deal between the U.S. and China in their ongoing negotiations to resolve their trade disputes, dealers said. Traders in Taiwan were also encouraged by a 0.54 percent rise on the Dow Jones Industrial Average and a gain of 0.76 percent on the tech-heavy Nasdaq on Friday, dealers said.

Buying in tech heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., continued on the Taiex, while the financial sector also gained on the back of bargain hunting, which helped the broader market sustain its momentum until the end of the session, they said.

"The market is highly optimistic that the U.S. and China will strike a deal soon in their trade negotiations, which sparked buying," Taishin Securities Investment Advisory analyst Tony Huang said. "As the Taiex overcame the strong resistance at the 240-day moving average of 10,449 points, it maintained its momentum to breach 10,500 points by the end of the session."

He said foreign institutional investors stood on the buy side, picking up large cap stocks in the electronics and financial sectors.

According to Taiex data, foreign institutional investors bought a net NT$5.27 billion worth of shares on the main board Monday after a net buy of NT$5.56 billion Friday.

Among the rising tech stocks, TSMC, the most heavily weighted stock on the local market, closed up 0.84 percent at the day's high of NT$241.00, with 26.80 million shares changing hands.

Hon Hai gained 1.98 percent to finish at the day's high of NT$72.00 after its chairman Terry Gou (郭台銘) raised his stake in the company in February for the fourth consecutive month.

Also in the electronics sector, which closed up 0.88 percent, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., added 0.65 percent to end at NT$4,670.00, and power management solution supplier Delta Electronics Inc. gained 1.68 percent to close at NT$151.50.

As the financial sector had been lagging behind the broader market for some time, investors seized the chance to seek bargains Monday, Huang said.

In the financial sector, Mega Financial Holding Co. added 1.46 percent to end at NT$27.85, Fubon Financial Holding Co. rose 1.66 percent to close at NT$46.00, and E. Sun Financial Holding Co. finished 2.67 percent higher at NT$23.10.

"The market has become technically healthier and further gains are possible but are likely to be limited as the Taiex moves closer to the next strong technical resistance ahead of 10,600 points," Huang said.

In addition to the technical factors, investors have to pay attention to the U.S. Federal Reserve's policymaking meeting on Tuesday and Wednesday, Huang said.

(By Frances Huang)