Taiwan shares end at almost 20,500 points following U.S. rally

Taipei, April 29 (CNA) Shares in Taiwan closed sharply higher at almost 20,500 points Monday after bellwether electronics sector buying was triggered by the rallying of U.S. tech stocks at the end of last week, dealers said.

The financial sector was another driver of the upturn on the main board as investors rushed to pick up financial heavyweights due to their general dividend payout plans, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 375.01 points, or 1.86 percent, at the day's high of 20,495.52 after coming off a low of 20,235.93. Turnover totaled NT$419.996 billion (US$12.883 billion).

The market opened up 0.57 percent and the momentum continued throughout the session, led by large-cap electronics stocks. Investors were encouraged by the gains on the U.S. markets on Friday when the tech-heavy Nasdaq index rose 2.02 percent and the Dow Jones Industrial Average increased 0.40 percent following strong earnings reported by Google parent Alphabet and Microsoft.

At the end of the session, the electronics index was up 1.65 percent, while the financial sector also made a strong showing, rising 3.37 percent.

"The robust earnings by Alphabet and Microsoft were encouraging so investors scrambled to pick up tech stocks on the U.S. markets, leaving inflation concerns behind for the moment," Moore Securities Investment Consulting analyst Adam Lin said.

On Friday, Washington released March core personal consumption expenditures price index (PCE) data, which rose 2.8 percent from a year earlier, beating a market consensus of 2.7 percent.

"It was no surprise that investors here took advantage of the U.S. tech rally to buy into large electronics stocks, particularly contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC)," Lin said.

After its American depositary receipts (ADRs) gained 1.26 percent on Friday, TSMC, the most heavily weighted stock in the local market, rose 1.66 percent to close at NT$795.00. TSMC's gains contributed about 105 points to the Taiex rise and sent the semiconductor sub-index up by 1.70 percent.

In addition, iPhone assembler Hon Hai Precision Industry Co. gained 2.26 percent to end at NT$158.50, and smartphone IC designer MediaTek Inc. added 1.00 percent to close at NT$1,015.00. The two companies are the No. 2 and No. 3 stocks in terms of market value on the main board.

Riding the waves of TSMC's upturn, other large-cap semiconductor stocks also moved higher with IC packaging and testing service provider ASE Technology Holding Co. rising 3.16 percent to end at NT$147.00 and United Microelectronics Corp., a smaller contract chipmaker, growing 1.00 percent to close at NT$50.40. In addition, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, rose 3.03 percent to end at NT$1,360.00.

Led by a 6.18 percent increase in U.S.-based AI chip designer Nvidia Corp. shares, AI server Quanta Computer Inc. rose 1.55 percent to close at NT$261.50, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, added 1.86 percent to end at NT$301.00.

"Outside the electronics sector, many non-tech stocks also steamed ahead. Today, several financial heavyweights got a boost with investors happy at generous dividend payout proposals," Lin said.

In the financial sector, which rose 3.37 percent, CTBC Financial Holding Co. soared 10 percent, the maximum daily increase, to close at NT$34.25 after the company announced a board-approved plan last week to issue a NT$1.8 cash dividend for each share to shareholders, the highest amount in 19 years. A U.S. brokerage gave a target price of NT$35 to CTBC Financial shares after the dividend payout plan.

Fubon Financial Holding Co. rose 2.66 percent to end at NT$69.40 after the company proposed issuing a NT$3 dividend per share -- NT$2.5 in cash dividend and NT$0.5 in stock dividend -- the highest so far among the local financial holding firms.

In addition, Cathay Financial Holding Co. rose 3.89 percent to close at NT$50.80, and E. Sun Financial Holding Co. added 2.03 percent to end at NT$27.65.

In the old economy sector, the construction index rose 3.34 percent with Cathay Real Estate Development Co. soaring 10 percent to close at NT$41.55, and JSL Construction & Development Co. rising 6.77 percent to end at NT$142.00.

Elsewhere in the old economy sector, Formosa Plastics Corp. rose 2.36 percent to close at NT$69.30, and Nan Ya Plastics Corp. gained 3.60 percent to end at NT$57.60. In addition, Taiwan Cement Corp. added 1.73 percent to close at NT$32.35, and Asia Cement Corp. rose 1.99 percent to end at NT$43.60.

"Despite today's gains, uncertainty over when a rate cut cycle in the U.S. could kick off might haunt the local market again," Lin said, adding "The Fed has scheduled a meeting this week and investors had better watch closely."

The two-day policymaking meeting will open Tuesday U.S. time.

According to the TWSE, foreign institutional investors bought a net NT$34.24 billion worth of shares on the main board Monday.