Taiwan shares end above 19,900 points as Hon Hai surges

Taipei, March 12 (CNA) Shares in Taiwan recovered from early lows and moved higher by almost 190 points to close above the 19,900-point mark Tuesday amid rotational buying by bargain hunters, particularly of manufacturing giant Hon Hai Precision Industry Co. shares.

In addition, a rebound by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and strong buying of select financial and old economy stocks helped fuel the rally as investors largely ignored losses on U.S. markets overnight.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 188.47 points, or 0.96 percent, at 19,914.55 after moving between 19,664.71 and 19,917.06. Turnover totaled NT$455.57 billion (US$14.46 billion).

The market opened 0.27 percent down and soon dipped to the daily low on early Tuesday morning as investors cut their holdings in large-cap IC stocks after seeing the Philadelphia Semiconductor Index losing 1.36 percent and the tech-heavy Nasdaq index shedding 0.41 percent overnight.

With the Taiex moving closer to the nearest technical support of around 19,600 points, bargain hunters rushed to pick up low-value stocks, particularly Hon Hai.

TSMC also regained its footing, which helped the broader market return to positive territory and maintain its strength until the end of the session, dealers said.

"It was a liquidity-driven rally as investors moved on from the lackluster U.S. market performance overnight," Mega International Investment Services Corp. analyst Alex Huang said.

"When TSMC lost its momentum in the morning session, buying rotated to Hon Hai and other large tech stocks," Huang said. "What's more, TSMC then went on to stage a technical rebound later on in the day, which prompted buying on the broader market at the end of the session."

TSMC, the most heavily weighted stock in the local market, rose 0.52 percent to close at NT$770.00, off a low of NT$754.00, while iPhone assembler Hon Hai, which is No. 3 in terms of market value, soared 8.68 percent to end at NT$119.00.

"Hon Hai is a market laggard compared to TSMC, which makes it attractive to bargain hunters," Huang said.

TSMC shares have jumped about 29 percent this year, on the back of an AI-driven frenzy. In that time, Hon Hai shares only rose by about 5 percent.

In addition to Hon Hai, other large-cap bargains in the electronics sector included power management solution provider Delta Electronics Inc., which rose 1.46 percent to close at NT$312.0, and Yageo Corp., the world's third-largest multi-layer ceramic capacitor (MLCC) maker, which gained 2.12 percent to end at NT$578.00.

Also in the tech sector, AI server maker Quanta Computer Inc. gained 2.00 percent to close at NT$254.50 and Asia Vital Components Co., an electronics manufacturer, soared 10 percent, the maximum daily increase, to end at NT$643.00.

Meanwhile, smartphone IC designer MediaTek Inc. lost 0.82 percent to close at NT$1,215.00, and application-specific integrated circuit (ASIC) designer Alchip Technologies Ltd. ended down 4.40 percent at NT$3,585.00.

"Several securities firms are building up their portfolios by buying underlying stocks before fundraising for their new Exchange Traded Funds (ETFs)," Huang said. "That's why many stocks still attracted buying despite the losses on the U.S. markets."

According to Huang, the new ETFs are valued between NT$150 billion and NT$160 billion.

An ETF, which operates like a mutual fund, serves as a type of pooled investment security and typically tracks a particular index, sector, commodity, or other asset.

Outside the tech sector, the financial sector rose 0.78 percent with China Development Financial Holding Co. up 1.12 percent to close at NT$13.60, and Yuanta Financial Holding Co. up 1.23 percent to end at NT$28.90.

In addition, Fubon Financial Holding Co. rose 0.72 percent to close at NT$69.70, and Cathay Financial Holding Co. ended up 0.98 percent at NT$46.50.

In the old economy sector, the tourism index rose 1.87 percent following a battering in recent sessions, in the wake of a government U-turn and continuation of the ban on Taiwanese tour groups traveling to China.

Lion Travel Service Co. rose 2.81 percent to close at NT$128.00, and Phoenix Tours International, Inc. gained 5.92 percent to end at NT$68.00. In addition, China Airlines rose 1.79 percent to close at NT$19.85, and EVA Airways gained 4.17 percent to end at NT$187.50.

With the construction index rising 1.89 percent, King's Town Construction Co. rose 3.68 percent to close at NT$39.45, and Delpha Construction Co. gained 5.65 percent to end at NT$42.05.

"Washington is scheduled to report the February consumer price index later today and the data should be closely monitored as the Fed will use the results to assess its monetary policy," Huang said. "Given the next policymaking meeting will be held March 19-20 (U.S. time), the inflation report will be critical."

According to the TWSE, foreign institutional investors bought a net NT$5.81 billion worth of shares on the main board Tuesday.