Taiwan shares rise on TSMC rally
Taipei, Sept. 16 (CNA) Shares in Taiwan moved sharply higher Wednesday as buying focused on contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) after a strong showing by its American depositary receipts (ADRs) overnight, dealers said.
The gains were capped, however, after the market breached 13,000 points and ran into technical hurdles, prompting investors to turn cautious, they said.
The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, ended up 131.11 points, or 1.02 percent, at 12,976.76, after moving between 12,948.72 and 13,021.68. Turnover was NT$206.33 billion (US$7.07 billion).
The market opened 1.12 percent higher on a surge by TSMC after its ADRs rose 6.65 percent in the U.S. on Tuesday, and the momentum continued to push the Taiex over the 13,000-point mark briefly before falling off in the last half hour of the session, dealers said.
"Today's gains in the Taiex largely came from TSMC's upturn as investors reacted to its strong ADRs," Ta Chan Securities analyst Jerry Chen said.
"Today was a settlement date for September futures contracts, so foreign institutional investors simply used heavily weighted TSMC to boost the spot market to try to profit on futures," Chen said.
According to the TWSE, foreign institutional investors bought a net NT$18.47 billion in shares Wednesday.
TSMC rose 2.92 percent to close at NT$458.00. Its gains alone contributed to a more than 100-point increase in the Taiex and contributed to 1.55 percent and 2.51 percent gains by electronics shares and the semiconductor sub-index, respectively.
"Buying in TSMC also reflected a move by Apple to unveil its new iPad, which is equipped with the new A14 processor that the Taiwanese firm is believed to be supplying," Chen said.
Among other gaining semiconductor stocks, United Microelectronics Corp., a smaller rival of TSMC, rose 1.58 percent to close at NT$25.70, and memory chipmaker Nanya Technology Corp. added 1.28 percent to end at NT$55.20.
Bucking the upturn, iPhone assembler Hon Hai Precision Industry Co. fell 0.38 percent to close at NT$78.80, and Largan Precision Co., a supplier of smartphone camera lenses to Apple, shed 2.60 percent to end at NT$3,560.00.
"The weakness of the two Apple concept stocks was due to disappointment that Apple did not introduce new iPhones as the market had expected," Chen said.
While the electronics sector drove the gains on the broader market, non-tech stocks appeared mixed.
In the old economy sector, Formosa Plastics Corp. lost 0.38 percent to close at NT$78.90 and Far Eastern New Century Corp. fell 0.57 percent to end at N$26.00.
Taita Chemical Co. shed 2.41 percent to close at NT$30.40, while food brand Uni-President Enterprises Corp. rose 0.61 percent to end at NT$66.40.
But the paper sector attracted strong buying on the back of a hike in product prices, with Cheng Loong Corp. rising 5.17 percent to close at NT$31.55 and rival YFY Inc. gaining 0.82 percent to end at NT$18.45.
In the financial sector, which closed up 0.14 percent, Cathay Financial Holding Co. rose 0.25 percent to close at NT$40.20, while CTBC Financial Holding Co. fell 0.26 percent to end at NT$18.85.
"Judging from today's movement, I think technical resistance ahead of 13,000 points remained strong," Chen said. "I'm afraid that after the latest rally, the market will face a pullback technically and fall into consolidation mode.
"In addition, tensions between Washington and Beijing remain and are expected to dictate global financial markets, which will in turn affect Taiwan's," Chen said.
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