Taiwan shares end up following technical rebound

Taipei, April 23 (CNA) Shares in Taiwan staged a technical rebound following a recent slump and closed higher Tuesday due to buying sparked by a rally on U.S. markets overnight amid eased concerns over Middle East tensions, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 188.06 points, or 0.97 percent, at 19,599.28 after moving between 19,509.74 and 19,709.00. Turnover totaled NT$344.87 billion (US$10.56 billion), compared with NT$492.25 billion on Monday.

The market opened up 0.79 percent, with momentum continuing throughout the session and large-cap electronics stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC), and AI-related device providers in focus as the tech-heavy Nasdaq index rose 1.11 percent and the Philadelphia Semiconductor Index gained 1.74 percent.

"After heavy losses in the past few sessions, the Taiex bounced back today, with the higher U.S. markets paving the way for a technical rebound," Hua Nan Securities analyst Kevin Su said.

"As fears over unrest reduced in the Middle East -- which had pushed down crude oil and gold prices -- investors resumed buying in the equity market," Su said.

He was referring to remarks by Iranian Foreign Minister Hossein Amirabdollahian, who told NBC News his country was not planning to respond to Israel's retaliatory strike launched on Friday.

Su said the electronics sector attracted bargain hunters, leading to a 1.20 percent rise Tuesday. Led by tech heavyweights, the Taiex lost 0.59 percent Monday after the main board recorded its steepest single-session drop of 774.08 points on Friday.

"But, judging from the lower turnover today, I think many investors were reluctant to chase prices after the latest Taiex volatility. They feared there was more volatility to come," Su said.

TSMC was back in the spotlight, serving as an anchor to Tuesday's uptrend, rising 1.62 percent to close at NT$754.00 and contributing almost 100 points to the Taiex increase.

"After a recent plunge, the stock remained in consolidation mode, and the nearest technical resistance was above NT$786.00, the 20-day moving average," Su said.

Before Tuesday's rebound, TSMC shares had lost 7.71 percent in the previous two sessions after the chipmaker downgraded its 2024 sale forecasts for the pure-play wafer foundry industry and its entire semiconductor business.

With the semiconductor sub-index up 1.44 percent, TSMC's equipment supplier Scientech Corp. gained 5.58 percent to end at NT$321.50, dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. rose 2.61 percent to close at NT$62.80, and Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, increased by 1.81 percent to end at NT$1,125.00.

Su said buying of artificial intelligence-related stocks was on the up after U.S.-based AI chip designer Nvidia Corp. rebounded by 4.35 percent overnight.

Among them, AI server maker Quanta Computer Inc.rose 3.04 percent to close at NT$237.00, and rival Wistron Corp. gained 2.30 percent to end at NT$111.00. In addition, Inventec Corp., another AI server supplier, rose 1.18 percent to close at NT$51.40, but Wistron's cloud application subsidiary, Wiwynn Corp., fell 1.39 percent to end at NT$2.130.00.

"Despite the gains in the electronics index, the tech sector accounted for only about 50 percent of today's total turnover, indicating interest spread to select non-tech stocks," Su said.

The construction index rose 1.35 percent amid hopes that quake-struck Hualien will require a significant amount of rebuilding work, Su said.

Chaiqui Construction Development Co. surged 10 percent, the maximum daily increase, to close at NT$22.90, and Cathay Real Estate Development Co. jumped 9.22 percent to end at NT$33.75.

In the transportation industry, which rose 0.77 percent, China Airlines rose 1.26 percent to close at NT$20.05, and EVA Airways gained 3.16 percent to end at NT$32.60, following expectations that the summer vacation will draw travelers.

The financial sector also rose 0.54 percent with Mega Financial Holding Co. up 1.27 percent to close at NT$40.00, Cathay Financial Holding Co. up 0.72 percent to end at NT$48.75, and CTBC Financial Holding Co. up 0.64 percent to close at NT$31.55.

"With Middle East tensions reducing for now, market attention has shifted to its fundamentals," Su said. "As part of the ongoing 2024 U.S. Earnings Season, heavyweights such as Tesla, Meta and Microsoft are set to report their earnings this week, which investors should pay attention to."

According to the TWSE, foreign institutional investors bought a net NT$1.48 billion worth of shares on the main board Tuesday.