Taiwan shares extend momentum, end above 12,800 points
Taipei, Aug. 5 (CNA) Shares in Taiwan continued their momentum from the previous session to close above the 12,800 point mark Wednesday, in the wake of gains posted on the U.S. markets overnight, dealers said.
Buying was seen almost across the board with the bellwether electronics sector driving the upturn and accounting for more than 70 percent of total turnover, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 92.38 points, or 0.73 percent, at 12,802.30, after moving between 12,739.99 and 12,816.39, on turnover of NT$238.99 billion (US$8.13 billion).
The market opened up 0.44 percent as investors took their cue from the gaining U.S. markets, where the Dow Jones Industrial Average rose 0.6 percent and the tech-heavy Nasdaq index added 0.35 percent to hit another new high Tuesday ahead of a new coronavirus stimulus package, dealers said.
The local tech sector continued to attract interest and buying spread to old economy and financial stocks, which have lagged behind electronics stocks, helping the Taiex jump over the technical hurdles before 12,800 points, dealers added.
"Since the Taiex overcame stiff technical resistance ahead of the 5-day moving average of 12,682 yesterday, momentum on the main board has turned stronger," Hua Nan Securities analyst Lu Chin-wei said.
"It was no surprise that investors sitting on large cash reserves in the current bull market simply seized on U.S. gains to raise their holdings today, paving the way for a further upturn down the road," Lu said.
Lu said large cap electronics stocks still dominated the broader market throughout the session.
"TSMC, the most heavily weighted stock on the local market, continued to move higher, acting as an anchor to the Taiex," Lu said. "It remained the favorite stock among many investors," he added.
Shares in TSMC rose 0.82 percent to close at NT$429.00. Led by the stock's gains, the electronics sector and the semiconductor sub-index gained 0.86 percent and 0.81 percent, respectively.
Other semiconductor stocks also received a boost with United Microelectronics Corp., a smaller rival of TSMC, up 1.43 percent to close at NT$24.90, and integrated circuit designer Novatek Microelectronics Corp. up 2.02 percent to end at NT$303.50.
PC stocks attracted buying because of their relatively affordable share prices, dealers said. Among them, Acer Inc. rose 4.14 percent to close at NT$21.40, and Asustek Computer Inc. added 4.66 percent to end at NT$224.50.
"Moreover, many non-tech stocks saw bargain hunting amid ample liquidity," Lu said.
Among gaining old economy stocks, Eclat Textile Co. rose 4.18 percent to close at NT$361.50, Taiwan Cement Corp. added 2.31 percent to end at NT$46.45, and Formosa Chemicals & Fibre Corp. was up 68.20.
In the financial sector, Changhwa Commercial Bank rose 1.06 percent to close at NT$19.05, and Shanghai Commercial & Savings Bank added 0.48 percent to end at NT$41.85.
"Looking forward, investors should keep a close eye on the on-going earnings season, which is expected to move the market," Lu said, pointing to iPhone assembler Hon Hai Precision Industry Co., which will hold an investor conference next week.
Hon Hai bucked the upturn, falling 0.26 percent to end at NT$77.90 amid fears over increased competition from China.
Despite the gains on the Taiex, foreign institutional investors sold a net NT$291.02 million worth of shares on the main board Wednesday.
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