Taiwan shares hit new closing high led by TSMC

Taipei, March 29 (CNA) Shares in Taiwan closed at a new record high Friday with the bellwether electronics sector attracting strong buying and pushing up the broader market, as investors took their cue from gains on U.S. markets overnight, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) led the upturn on the local main board, while other tech stocks related to artificial intelligence development also steamed ahead to fuel the rally, dealers added.

Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 147.90 points, or 0.73 percent, at 20,294.45, after moving between 20,156,34 and 20,335.92. Turnover totaled NT$475.39 billion (US$14.86 billion).

The market opened up 9.79 points and buying soon accelerated on the back of a record closing high by the Dow Jones Industrial Average overnight as TSMC and AI related stocks such as AI server maker Quanta Computer Inc., moved higher on a strong comeback, after a slump the previous session, dealers said.

The strength continued until the end of the session to lift the Taiex to a new high, beating the previous record of 20,228.43 on March 22.

"It was still a liquidity driven rally," Concord Securities analyst Kerry Huang said. "Bargain hunters turned active after yesterday's weakness on the Taiex by seizing on the higher Dow as an excuse to buy."

"I think the buying largely came from local investors, both institutional and retail," Huang said.

According to the TWSE, local investment trust firms bought a net NT$59.95 billion worth of shares on the main board Friday before a new Exchange Traded Fund (ETF) -- Yuanta Taiwan Value High Dividend ETF -- is listed on April 1, prompting investors to build up their holdings of the fund's constituents.

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.

On Thursday, the Taiex lost 0.27 percent after TSMC, the most heavily weighted stock on the local market, shed 1.28 percent.

"Today, TSMC regained its footing, driving the broader market higher and hit a new high," Huang said.

On Friday, TSMC gained 1.30 percent to close at NT$779.00, and its gains contributed more than 80 points to the Taiex's rise, sending the electronics index and semiconductor sub-index higher by 0.92 percent and 1.42 percent, respectively.

TSMC buying spread to other semiconductor stocks, in particular highly priced ones with TSMC's application specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. rising 2.05 percent to end at NT$1,245.00, smartphone IC designer MediaTek Inc. growing 3.02 percent to close at NT$1,195.00, and Alchip Technologies Ltd., another ASIC designer, up 5.53 percent to end at NT$3,340.00.

In addition to semiconductor heavyweights, Huang said, AI related stocks made a comeback after recent consolidation with Quanta Computer up 4.82 percent to close at NT$293.50, rival Wistron Corp. up 3.73 percent to end at NT$125.00 in the computer and peripheral industry, which grew 1.57 percent.

Inventec Corp., another AI server supplier, rose 2.05 percent to close at NT$59.70, and Wistron's cloud application subsidiary, Wiwynn Corp., gained 3.65 percent to end at NT$2,270.00.

In the old economy sector, the cement and petrochemical industries attracted more buying. "These old economy stocks took advantage of their relatively low valuations after recent consolidation to digest pressure," Huang said. "They had lagged far behind their tech counterparts."

In the cement industry, which rose 0.85 percent, Taiwan Cement Corp. gained 1.42 percent to close at NT$32.15, and Asia Cement Corp. added 0.85 percent to end at NT$41.30.

With the petrochemical index rising 1.13 percent, Nan Ya Plastics Corp. gained 1.63 percent to close at NT$56.00, Formosa Petrochemical Corp. rose 1.31 percent to end at NT$69.50, Formosa Plastics Corp. added 1.17 percent to close at NT$68.90, and Formosa Chemicals & Fibre Corp. ended up 0.91 percent at NT$55.20.

Elsewhere in the old economy sector, shares in Evergreen Marine Corp., the largest container cargo shipper in Taiwan, bucked the upturn, falling 2.27 percent to close at NT$172.00, while rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. rose 0.68 percent and 0.23 percent, respectively, to end at NT$44.40 and NT$44.10.

In the financial sector, which rose 0.79 percent, Cathay Financial Holding Co. rose 0.83 percent to close at NT$48.65 and Fubon Financial Holding Co. ended up 0.58 percent at NT$48.65.

Although U.S. markets will be closed for the Good Friday holiday, Washington will still report the February personal consumption expenditures price Index (PCE), favored by the Federal Reserve to gauge inflation.

"As such, investors need to keep a close eye on upcoming economic data like the PCE and non-farm payroll data to be released next week, which could move the U.S. markets," Huang said.