Taiwan shares end up after election but gains capped

Taipei, Jan. 15 (CNA) Shares in Taiwan closed slightly higher Monday after investors rebuilt their positions with political uncertainties removed following the presidential election over the weekend, dealers said.

The bellwether electronics sector led the upturn as investors resumed buying after the election, while power development-related developers and biotech stocks also moved higher on expectations that the ruling Democratic Progressive Party (DPP), which won the presidential vote, would continue to lend them support, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 33.99 points, or 0.19 percent, at 17,546.82 after moving between 17,532.98 and 17,632.77. Turnover totaled NT$285.93 billion (US$9.15 billion).

The market opened up 0.16 percent and soon hit the day's high, up almost 120 points in the early morning session as investors rebuilt their positions and appeared to largely ignore the lackluster performance of the U.S. markets on Friday.

With the Taiex briefly breaching the 17,600-point mark and moving closer to the nearest technical resistance of 17,639 points -- around the 20-day moving average -- some investors began selling, capping gains by the end of the session.

"Political factors had affected the local stock market for some time, so it was not surprising that the Taiex staged a rebound after those uncertainties were removed," Cathay Futures Consultant analyst Tsai Ming-han (蔡明翰) said.

President-elect Lai Ching-te (賴清德) of the DPP secured 40.05 percent of the total vote, leading to the party receiving an unprecedented third term.

"But with the U.S. markets staying in consolidation mode, investors in Taiwan appeared reluctant to buy up for the moment, particularly ahead of the 20-day moving average," Tsai said.

The tech sector was a major boost to the main board as it moved ahead, Tsai added.

"Investors rebuilt their positions today in particular through buying up large semiconductor socks, but gains were partly eroded later in the session," Tsai said.

The electronics index rose 0.31 percent with the semiconductor sub-index up 0.45 percent after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the Taiwan Stock Exchange, rose 0.34 percent to close at NT$586.00, coming off a high of NT$590.00.

"The NT$590.00 level appeared to be the technical ceiling for TSMC now," Tsai said. "As the market returned to normal after the election, investors have become nervous ahead of TSMC giving guidance for the current quarter and 2024 more generally in an investor conference set for Thursday."

Among other semiconductor stocks, United Microelectronics Corp. (UMC), a smaller contract chipmaker, gained 1.40 percent to end at NT$50.80, dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. rose 3.92 percent to close at NT$71.50, and Novatek Microelectronics Corp., UMC's display driver IC design subsidiary, added 4.71 percent to end at NT$534.00.

Bucking the upturn, smartphone IC designer MediaTek Inc., second to TSMC in terms of market value, lost 0.43 percent to close at NT$922.00, and Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design unit, ended down 2.76 percent at NT$1,760.00.

Stocks related to artificial intelligence development largely came under pressure with AI server maker Quanta Computer Inc. falling 1.95 percent to close at NT$226.50, and rival Wistron Corp. dropping 0.90 percent to end at NT$98.60.

"Stocks backed by the DPP attracted buying today due to the party's victory in the Saturday vote. Power development-related stocks and biotech stocks also did well on hopes that government support would continue," Tsai said.

Riding the waves of state-owned Taiwan Power Co.'s efforts to boost the resilience of electricity grids in the country, Teco Electric & Machinery Co. added 1.45 percent to close at NT$45.55.

Shihlin Electric & Engineering Corp. rose 1.71 percent to end at NT$119.00, Fortune Electric Co. gained 1.76 percent to close at NT$376.50, and Luxe Green Energy Technology Co. added 2.56 percent to end at NT$34.00.

In the biotech industry, which rose 1.98 percent, intra-articular injection maker Maxigen Biotech Inc. rose 4.96 percent to close at NT$296.50, and oncology and specialty generics drug developer Lotus Pharmaceutical Co. ended up 0.88 percent to end at NT$46.10.

In the financial sector, which lost 0.19 percent, Cathay Financial Holding Co. fell 0.11 percent to close at NT$344.45, while Fubon Financial Holding Co. ended unchanged at NT$64.10.

In addition to TSMC, "many heavyweights on the U.S. markets will report their results during the current earnings season and their guidance is expected to impact their shares and in turn, move the local stock market over the next few weeks," Tsai said.

Despite the Taiex gains, foreign institutional investors largely leaned to the sell side, registering a net sell of NT$9.09 billion worth of shares on the main board Monday.