Taipei, Dec. 11 (CNA) Shares in Taiwan staged a rebound from a session earlier to end above the 11,700-point mark Wednesday as the bellwether electronics sector advanced, helping the broader market climb out of its earlier doldrums, dealers said.
Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, closed at a new high, serving as a driver that pushed up the main board, in particular in the late-trading session, after the company reported a day earlier its highest-ever sales for November, the dealers said.
Turnover remained moderate, however, as many investors preferred to stay on the sidelines ahead of the conclusion of a U.S. Federal Reserve policy-making meeting due later in the day, while the ongoing trade dispute between Washington and Beijing also made many investors wary, the dealers said.
The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex, closed up 72.93 points, or 0.63 percent, at the day's high of 11,700.77, after coming off an early low of 11,622.58, on turnover of NT$124.32 billion (US$4.08 billion).
The market opened up 7.23 points but soon fell into negative territory in the early-morning session in the wake of lackluster performance in the U.S. markets, where the Dow Jones Industrial Average and the tech-heavy Nasdaq index fell 0.1 percent overnight amid worries about global trade, the dealers said.
However, the Taiex regained its footing from the mid-morning session as TSMC, the most heavily weighted stock in the local market, posted gains and buying spread to other large-cap stocks, which vaulted the broader market back into positive territory and the energy accelerated into the end of the session, they said.
"Judging from today's movement, I think investors simply bought into market heavyweights, which lifted the entire index," Dayu International Securities Investment Consultant analyst Chang Chih-cheng said.
Among the gaining large-cap stocks, TSMC rose 1.75 percent to close at the day's high of NT$319.00, with 31.09 million shares changing hands.
TSMC's gains contributed an increase of about 50 points to the Taiex and sent the bellwether electronics sector up 0.99 percent at the end of the session.
Due to the upturn that pushed its shares to a new high, TSMC's market capitalization also reached a record high of NT$8.27 trillion, as investors were encouraged by the chipmaker's November sales report in which its consolidated sales rose to the highest level on strong demand for its high-end processes, shrugging off worries over slow-season effects.
Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market cap, added 1.11 percent to end at NT$91.30, and integrated circuit designer MediaTek Inc. rose 0.94 percent to close at NT$429.00.
"In addition to large tech stocks, investors also picked up big financial ones, which still lagged behind their electronics counterparts, lending additional support to the broader market," Chang said.
In the financial sector, which ended up 0.35 percent, Cathay Financial Holding Co. rose 1.68 percent to close at NT$42.40, Cathay Financial Holding Co. added 0.88 percent to end at NT$45.95 and CTBC Financial Holding Co. grew 0.68 percent to close at NT$22.10 on solid profits in the past 11 months.
As market attention was largely focused on the tech sector, old economy stocks appeared mixed throughout the session, the dealers said.
Among them, food brand Uni-President Enterprises Corp. rose 1.39 percent to close at NT$72.80, but Yulon Nissan Motor Co., which sells cars under the Nissan brand, lost 0.54 percent to end at NT$277.00, while Formosa Plastics Corp. closed unchanged at NT$96.50.
"The Taiex closed above the 11,700-point mark after jumping over the stiff technical resistance hurdle of 11,668, an intraday high seen Nov. 6, indicating that the main board turned technically healthier," Chang said.
"Due to uncertainty over the global trade issues, it is possible for the market to see volatility, so we have to pay close attention to whether Washington will impose tariffs on an additional US$156 billion-worth of Chinese goods on Dec. 15 as scheduled," Chang added.
"Moreover, the Fed's comments on the economy after its meeting ends later today are also a factor that could move global markets," he said. According to the TWSE, foreign institutional investors bought a net worth of NT$4.05 billion on the main board Wednesday after a net sell of NT$2.73 billion a day earlier.