Taiwan shares end above 11,000 points with tech sector gains

Taipei, Oct. 8 (CNA) Shares in Taiwan continued their momentum from a session earlier to close above the 11,000-point mark Tuesday as the bellwether electronics sector moved higher throughout the session, dealers said.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, led the upturn amid optimism over its lead over its peers in developing high-end technologies after the company announced a day earlier that it has begun mass production of chips made on its advanced 7 nanometer+ technology, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, ended up 82.25 points, or 0.75 percent, at 11,017.31, after moving between 10,986.01 and 11,020.51, on turnover of NT$128.45 billion (US$4.16 billion).

It was the first time the Taiex had closed above 11,000 points since May 30, when the benchmark index ended at 11,096.30 points.

The market opened up 0.47 percent as investors shrugged off the latest losses in the U.S. markets, where the Dow Jones Industrial Average closed down 0.30 percent and the S&P 500 index ended down 0.45 percent overnight amid caution ahead of high-level trade talks between the United States and China scheduled to open Thursday, the dealers said.

Buying on the local main board accelerated, with TSMC in focus, in the wake of the progress of the company in the 7nm+ process development, boosting the Taiex to close at a level near the day's high, the dealers added.

According to TSMC, the 7nm+ process, which provides 15 percent-20 percent more density and improved power consumption than the 7nm technology, is paving the way for the company to launch trial production of chips made on the more advanced 6nm process in the first quarter of next year, and volume production of the 6nm technology is planned by the end of the year.

The news boosted TSMC's American depositary receipts on the U.S. market by 1.12 percent overnight to outperform the Philadelphia Semiconductor Index, which ended down 0.71 percent overnight.

"So investors here seized upon the positive lead to buy more TSMC shares today," Hua Nan Securities Investment Management Chairman David Chu said. "The stock simply served as a driver to the gains enjoyed by the broader market."

TSMC rose 3.06 percent to close at the day's high of NT$286.50, with 35.19 million shares changing hands. TSMC's gains boosted the Taiex by about 80 points and the bellwether electronics sector and the semiconductor sub-index by 1.16 percent and 2.11 percent, respectively.

"I think foreign institutional investors remained on the buy side for TSMC shares today," Chu said, adding that as long as foreign buying continues, the stock is expected to hit another high in the short term.

After the market closed, the TWSE released data showing that foreign institutional investors bought a net NT$10.15 billion-worth of shares on the main board Tuesday after a net buy of NT$2.55 billion Monday.

Chu said TSMC's shares were also lifted by better-than-expected sales of the latest iPhones, which continued to lend support to other Apple concept stocks on the local main board.

Among the gaining Apple suppliers, iPhone assembler Hon Hai Precision Industry Co. rose 0.82 percent to close at NT$74.00 and its metal casing subsidiary, Foxconn Technology Co., also added 1.57 percent to end at NT$64.50.

Bucking the upturn on the broader market, Largan Precision Co., a supplier of smartphone camera lenses to Apple, closed unchanged at NT$4,480.00, but buying continued to rotate to its smaller rival, Genius Electronic Optical Co., which added 1.14 percent to end at NT$487.50.

"Largan is set to hold an investor conference tomorrow so it is understandable that investors were cautious today before the company's third-quarter results and fourth-quarter guidance," Chu said.

With buying concentrated on the tech sector, old economy stocks appeared mixed, with food brand Uni-President Enterprises Corp. down 0.68 percent to close at NT$73.00 and textile maker Far Eastern New Century Corp. down 0.52 percent to end at NT$28.60.

However, Formosa Chemicals & Fibre Corp. gained 1.38 percent to close at NT$87.90.

Chu said the financial sector closed up 0.46 percent, lending further support to the Taiex. In the sector, CTBC Financial Holding Co. rose 0.97 percent to close at NT$20.75 and Fubon Financial Holding Co. gained 0.68 percent to end at NT$44.30.

"Despite today's gains, investors had better keep alert over the upcoming trade talks between Washington and Beijing, which are expected to move the U.S. markets and in turn impact other financial markets, including Taiwan," Chu said.