Taiwan shares stage limited rebound after holiday

Taipei, April 8 (CNA) Shares in Taiwan staged a technical rebound Monday after a slump seen a session earlier on April 3, a day ahead of the four-day Tomb Sweeping Festival holiday, but the gains were capped amid lingering concerns over when the U.S. Federal Reserve will start a rate-cut cycle.

While the bellwether electronics sector saw its upturn limited, buying rotated to nontech stocks, in particular in the financial sector, to help the broader market stay above the previous closing level.

The Taiex, the Taiwan Stock Exchange's (TWSE) weighted index, ended up 80.10 points, or 0.39 percent, at 20,417.70 after moving between 20,379.83 and 20,487.83. Turnover totaled NT$400.63 billion (US$12.47 billion).

The market opened up 0.28 percent, bouncing back from a 0.63 percent decline on April 3, and buying accelerated led by large-cap stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), in the wake of a 1.24 percent increase on the tech-heavy Nasdaq index and a 0.80 percent rise on Dow Jones Industrial Average on Friday.

However, with the Taiex moving closer to 20,500 points, some investors shifted to the sell side to pocket their earlier gains, with select old economy and financial stocks resilient throughout the session.

"Although the U.S. markets posted gains on Friday, the upturn was technical in nature after their losses seen on Thursday," Cathay Futures Consultant analyst Tsai Ming-han said. "As the American markets remained in consolidation, it was no surprise that shares in Taiwan failed to sustain all of its earlier strength."

"The markets at home and abroad stayed alert over when the Fed will kick off a rate cut cycle as recent data showed the U.S. economy remained strong," Tsai said, referring to the better-than-expected nonfarm payroll report for March.

The electronics sector, which originally led the local main board to move higher before part of the gains were given up, rose 0.22 percent with the semiconductor subindex up only 0.05 percent as TSMC, the most heavily weighted stock in the local market, gained 0.38 percent to close at NT$783.00, off a high of NT$792.00.

"Many investors are waiting for an investor conference scheduled by TSMC for April 18 for its comments on the market outlook," Tsai said.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. lost 0.86 percent to end at NT$1,150.00, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, shed 6.14 percent to close at NT$1,300.00, and Alchip Technologies Ltd. ended down 6.94 percent at NT$3,150.00.

In addition, IC packaging and testing services provider ASE Technology Holding Inc. lost 0.97 percent to close at NT$153.00, while United Microelectronics Corp., a smaller contract chipmaker, bucked the downturn, rising 0.97 percent to end at NT$52.10.

"While semiconductor heavyweights lost steam, their tech counterparts related to artificial intelligence development stole the spotlight on rotational buying," Tsai said.

In the computer and peripheral industry, which rose 0.78 percent, Giga-Byte Technology Co., a leading graphics card vendor for AI applications, rose 7.09 percent to close at NT$340.00, and AI server maker Wistron Corp. ended up 1.93 percent at NT$131.00.

"Another silver lining for today was that the financial sector attracted bargain hunters and served as an anchor to stabilize the broader market," Tsai said. "Many financial stocks have lagged far behind their tech stocks for some time."

The financial sector rose 0.94 percent with Yuanta Financial Holding Co. rising 1.17 percent to close at NT$30.30, and CTCB Financial Holding Co. growing 1.91 percent to end at NT$32.05. In addition, Cathay Financial Holding Co. rose 0.62 percent to close at NT$48.35, and Fubon Financial Holding Co. added 0.15 percent to end at NT$68.70.

Tsai said electric machinery and wire/cable makers benefited from Taiwan Power Co.'s massive investments to strengthen the resilience of electricity grid networks in the country, with Allis Electric Co. soaring 10 percent, the maximum daily increase, to close at NT$116.50, and Shihlin Electric & Engineering Corp. rising 2.62 percent to end at NT$313.50.

Meanwhile, Hua Eng Wire and Cable Co. surged 10 percent to close at NT$33.00, and Walsin Lihwa Corp., another cable and wire supplier, gained 3.58 percent to end at NT$37.60.

"As the U.S. dollar continued to rise against the Taiwan dollar, prompting fund exits from the country, it is not easy for the Taiex to post sustainable significant gains for the moment," Tsai said. "Investors had better keep a close eye on the U.S. March inflation figure (due on Wednesday), which is expected to dictate the greenback value."

According to the TWSE, foreign institutional investors sold a net NT$12.37 billion worth of shares on the main board Monday, when the U.S. dollar rose 0.038 to close at NT$32.095 against the Taiwan dollar.