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Taiwan shares end up on U.S. market gains

2019/07/15 19:53

Taipei, July 15 (CNA) Shares in Taiwan staged a technical rebound and closed up Monday on the back of gains posted by markets in the United States at the end of last week, dealers said.

Buying rotated to the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), as investors expect TSMC to give positive guidance for the third quarter at an investor conference scheduled for Thursday, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended up 52.08 points, or 0.48 percent, at 10,876.43, after moving between 10,769.57 and 10,880.56, on turnover of NT$117.37 billion (US$3.78 billion).

The market opened down 4.43 points and fell to the day's low just after 9:30 a.m. as iPhone assembler Hon Hai Precision Industry Co. came under pressure on news that company founder Terry Gou (郭台銘) had lost his bid for the opposition Kuomintang's (KMT's) nomination in the 2020 presidential race, dealers said.

But, with the Taiex falling below 10,800 points, buying re-emerged, seizing on a 240-point increase on the Dow Jones Industrial Average on Friday, they said.

Buying in TSMC, the most heavily weighted stock in the Taiwan stock market, led the rebound, and Hon Hai managed to recoup its losses in the afternoon session to give a further boost to the market by the end of the session, dealers said.

"It surprised me that the Taiex opened lower and stayed below the previous closing level in the morning despite the Dow's upturn," Mega International Investment Services Corp. analyst Alex Huang said.

"The earlier weakness largely resulted from the fall suffered by Hon Hai as Gou failed to win the KMT's presidential primary, but fortunately, the shock disappeared later to help the stock return to positive territory," Huang said.

Hon Hai, the world's largest contract electronics maker, rose 0.64 percent to close at NT$78.10, off an earlier low of NT$76.10.

Gou stepped down as Hon Hai's chairman in June after he announced in mid-April his decision to pursue the KMT's presidential nomination. The market has since watched the company closely to see how it will go forward without the strong-willed Gou in the top decision-making position.

Gou lost out on the KMT nomination to Kaohsiung Mayor Han Kuo-yu (韓國瑜), and Microbio Co., a so-called "Han Kuo-yu concept" stock, rose 10 percent, the maximum daily increase, to end at NT$44.95.

Han's younger brother Han Kuo-yao (韓國瑤) now serves as a board member of Microbio.

"The market was also boosted by other tech heavyweights, in particular TSMC, so the Taiex regained its footing after falling below 10,800 points this morning," Huang said.

"The movement of TSMC shares showed the market was generally upbeat about TSMC's outlook, with expectations that the company will give positive leads for the third quarter at the Thursday investor conference because of the strength of its advanced 7 nanometer process," Huang said.

TSMC rose 1.60 percent to close at the day's high of NT$254.50 with 29.67 million shares changing hands. TSMC's gains contributed an increase of about 40 points in the Taiex and boosted the electronics sector by 0.86 percent.

TSMC's buying also spread to other semiconductor stocks, in particular in the memory chip industry that has benefited from rising product prices.

Nanya Technology Corp. closed 4.80 percent higher at NT$69.90, and Winbond Electronics Corp. rose 2.69 percent to end at NT$17.15.

While the electronics sector served as a driver of the gains on the broader market, non-tech stocks appeared mixed, dealers said.

Among old economy stocks, Taiwan Cement Corp. fell 0.68 percent to close at NT$44.05, and China Steel Corp., the largest steel maker in Taiwan, lost 0.40 percent to end at NT$24.70, while Eclat Textile Co. rose 3.46 percent to close at NT$403.50.

In the financial sector, which ended down 0.44 percent, Shanghai Commercial & Savings Bank shed 1.75 percent to end at NT$56.20, Fubon Financial Holding Co. fell 0.23 percent to close at NT$43.85, and Mega Financial Holding Co. lost 0.47 percent to end at NT$31.70.

"For now, the Taiex seems to have some technical support at around the 20-day moving average of 10,770 points," Huang said. "But I'm afraid TSMC will face profit-taking once the investor conference delivers the good news the market has widely anticipated."

According to the TWSE, foreign institutional investors bought a net NT$911.70 million in shares on the market Monday.

(By Frances Huang)Enditem/ls