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Taiwan shares soar over 100 points on scheduled Trump-Xi meeting

2019/06/19 11:50:32

Taipei, June 19 (CNA) Taiwan shares moved sharply higher Wednesday morning after U.S. President Donald Trump announced overnight that he will meet with Chinese President Xi Jinping (習近平) at the G20 summit in Osaka next week, dealers said.

Investors rushed to pick up large-cap tech stocks that had been hammered recently by worries over escalating trade tensions between the United States and China, hoping the G20 talks will reduce the friction, they said.

As of 11:33 a.m., the weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex had risen 138.15 points, or 1.31 percent, to 10,700.56, on turnover of NT$83.91 billion (US$2.68 billion).

The market opened up 0.79 percent after the Dow Jones Industrial Average closed up 1.35 percent and the tech-heavy Nasdaq index ended up 1.39 percent overnight following Trump's announcement of the planned meeting, dealers said.

Buying then accelerated as investors picked up tech heavyweights, especially contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which had come under pressure because of U.S. restrictions on doing business with Chinese telecom equipment and smartphone vendor Huawei Technologies Co., a major TSMC client, they said.

"Before Trump's announcement, caution had prevailed in the market as investors dumped 'Huawei concept' stocks such as TSMC," MasterLink Securities analyst Tom Tang said.

"Now it seems that sentiment has improved to some extent, prompting investors to take advantage of these stocks at relatively low valuations."

"The solid buying in the bellwether electronics sector boosted turnover today, and total turnover could hit NT$140 billion. That could help the Taiex sustain its strength later in the day," Tang said.

Turnover was an anemic NT$80.98 billion on Tuesday.

As of 11:33 a.m., TSMC had gained 2.55 percent to NT$241.50, with 24.10 million shares changing hands. TSMC's gains alone contributed to an increase of about 60 points in the Taiex and boosted the electronics index by 2.19 percent.

Among other Huawei suppliers, smartphone camera lens supplier Largan Precision Co. had added 6.61 percent to NT$3,950.00, and printed circuit board maker Unimicron Technology Corp. had jumped 10 percent, the maximum daily increase, to NT$34.75.

"The solid gains posted by tech stocks helped the Taiex overcome stiff technical resistance at around 10,650 points this morning," Tang said.

"But I would suggest continuing to pay attention to the global trade issue since the upcoming meeting between Trump and Xi could yield little progress, which would affect global financial markets again," Tang cautioned.

(By Frances Huang)