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Taiwan shares make comeback as tech stocks gain

06/09/2023 07:00 PM
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CNA file photo
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Taipei, June 9 (CNA) Shares in Taiwan rebounded from a slump a day earlier as tech stocks bounced back after doing well on U.S. markets overnight, dealers said.

Buying was also sparked by hopes that the U.S. Federal Reserve will not raise interest rates at a policymaking meeting next week and bullishness over artificial intelligence development, dealers said.

After falling 1.12 percent on Thursday, the Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 152.71 points, or 0.91 percent, at 16,886.40 on Friday after moving between 16,775.92 and 16,896.99. Turnover totaled NT$286.85 billion (US$9.33 billion).

The market opened up 0.25 percent and saw momentum accelerate on interest in tech stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC).

TSMC was boosted by a 1.02 percent rise in the tech-heavy Nasdaq index, where American chip designers Nvidia Corp. and Advanced Micro Devices, Inc. (AMD) rose 2.76 percent and 2.73 percent, respectively, dealers said.

"Despite the losses on Thursday, the market still has high hopes for AI development after seeing the gains posted by Nvidia and AMD overnight," said Cathay Futures Consultant analyst Tsai Ming-han (蔡明翰).

After Nvidia CEO Jensen Huang (黃仁勳) talked up AI applications at Computex Taipei earlier this month, "AMD is expected to launch its AI products next week, prompting investors to think enthusiasm over AI will continue," Tsai said.

As a major supplier to Nvidia and AMD, TSMC, the most heavily weighted stock in the local market, rose 1.07 percent to close at NT$565.00. Led by TSMC, the electronics index and semiconductor sub-index gained 1.22 percent and 1.05 percent, respectively.

Tsai cautioned, however, that TSMC's gains were capped because investors were waiting to see its May sales numbers, released after the market closed Friday, and because the stock closed in on its nearest level of technical resistance at NT$568.00.

Other semiconductor stocks also posted gains. United Microelectronics Corp., a smaller contract chipmaker, finished 1.55 percent higher at NT$52.30, and IC packaging and testing services provider ASE Technology Holding Co. rose 2.86 percent to close at NT$126.00.

In addition to TSMC, contract electronics makers also got a boost from their cooperation with Nvidia in AI server development to further boost electronics shares throughout the session, Tsai said.

Among them, computer peripheral supplier Gigabyte Technology Co. soared 10 percent, the maximum daily increase, to close at NT$240.50.

Contract notebook makers Quanta Computer Inc., Wistron Corp. and Inventec Corp. also jumped 9.58 percent, 7.35 percent and 6.18 percent, respectively, to end at NT$131.50, NT$73.00 and NT$38.65

Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co. rose 0.93 percent to close at NT$108.00, while power management solution provider Delta Electronics Inc. underperformed the broader market, dropping 0.62 percent to end at NT$323.50.

IC designer MediaTek Inc. fell 0.52 percent to close at NT$764.00 after Taiwanese counterpart Realtek Semiconductor Corp. filed a lawsuit in California accusing MediaTek of violating U.S. antitrust law. Realtek rose 2.03 percent to end at NT$403.00.

"Buying was also seen among select old economy stocks. Today, interest went to companies that supply components for electric vehicle production amid active rotational buying," Tsai said.

Among these EV part suppliers, E-Lead Electronic Co. rose 5.11 percent to close at NT$74.00, and Hota Industrial Manufacturing Co. gained 3.09 percent to end at NT$73.50.

"But the tourism industry took a beating as investors rushed to lock in their gains built in recent sessions," Tsai said.

The tourism sector fell 1.63 percent, with Formosa International Hotels Corp. down 4.94 percent to close at NT$308.00, and Chateau International Development Co. down 3.74 percent to end at NT$77.20.

In addition, My Humble House Hospitality Management Consulting fell 3.03 percent to close at NT$73.50, and FDC International Hotels Corp. lost 2.49 percent to end at NT$98.00.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. dropped 0.80 percent to close at NT$76.00, and rival AGV Products Corp. lost 1.28 percent to end at NT$11.55.

Shihlin Paper Corp. rose 7.72 percent to close at NT$58.60, however, because of the many carbon credits they hold, while YFY Inc., another paper product supplier, gained 2.03 percent to end at NT$11.55.

"The markets are widely anticipating that the Fed will not hike rates next week, but investors should still watch for May consumer price index data (due on June 13 U.S. time) in the U.S. and for other indicators before the meeting wraps up," Tsai said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$6.87 billion in shares Friday.

(By Frances Huang)


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