Local bourse ends above 8,700 points for first time in over 2 years
Taipei, March 6 (CNA) Shares in Taiwan closed above 8,700 points Thursday, the highest point in more than two years, as the bellwether electronics sector continued its momentum from the previous session, dealers said.
Buying focused on large-cap and high-price electronics stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and integrated circuit designer MediaTek Inc., they said.
The financial sector, which had been in consolidation mode for some time amid concerns over a government plan to raise the sales tax, regained its footing and helped push the index higher by the close, dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE) ended up 80.86 points, or 0.93 percent, at 8,713.79, after moving between 8,660.29 and 8,719.17, on turnover of NT$116.95 billion (US$3.86 billion).
The market opened up 0.32 percent as investors shrugged off a lackluster Wall Street overnight and maintained their interest in the electronics sector, dealers said. Buying spread to financial stocks, speeding up the momentum, while many old economy stocks remained in the doldrums, they said.
"Buying largely came from foreign institutional investors as they raised the number of long position contacts in the futures market," Concord Securities analyst Kerry Huang said.
Once investors build up long position contacts in the futures market, they tend to boost share prices in the spot market in a bid to profit in futures.
According to the TWSE, foreign institutional investors bought a net NT$10 billion worth of local shares on the main board Thursday.
"The electronics sector remained the favorite of foreign institutional investors and drove the significant gains of the broader market," Huang said.
The electronics sub-index closed up 1.40 percent and accounted more than 60 percent of the total trading volume.
Among the gaining electronics stocks, TSMC, the most heavily weighted stock in the local market, rose 2.73 percent to close at NT$113.00, and MediaTek added 3.22 percent to end at NT$465.00.
Siliconware Precision Industries Co., one of Taiwan's leading IC packaging and testing services providers, gained 2.11 percent to close at NT$38.80 after it posted better-than-expected consolidated sales for February.
Dealers said the strong showing by the semiconductor sector reflected hopes that the global IC industry will stage a rebound in the second quarter of this year after inventory adjustments in the previous two quarters.
"Financial stocks also helped boost the broader market on bargain hunting," Huang said. "Investors are hoping that the Legislature will soon pass the trade-in-services agreement between Taiwan and China."
The trade pact was signed in June 2013 but remains stalled in the Legislature.
In the financial sector, which ended up 1.00 percent, CTBC Financial Holding Co. rose 2.07 percent to close at NT$19.70 and Cathay Financial Holding Co. gained 2.06 percent to end at NT$44.50.
"After breaching 8,700 points, the local bourse now faces the nearest technical resistance at around 8,800 points. We have to keep watching closely how the global equity markets will perform, which could move local shares," Huang said.
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