Taiwan shares end at new high above 21,100 points

Taipei, May 14 (CNA) Shares in Taiwan closed at a record high for the third consecutive trading session Wednesday, ending above the 21,100 point mark, as the bellwether electronics sector led the way in the wake of gains posted by tech stocks on U.S. markets overnight, dealers said.

Large cap financial stocks also steamed ahead amid optimism toward their bottom lines, while the upturn on the main board was capped as investors took advantage of the initial gains, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 161.36 points, or 0.77 percent, at 21,147.21 after moving between 20,984,70 and 21,308.32. Turnover totaled NT$489.25 billion (US$15.14 billion).

The market opened down 1.15 points but soon regained its footing as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) attracted strong buying with investors motivated by a 3.78 percent increase posted by its American depositary receipts (ADRs) overnight, dealers said.

The financial sector joined the upturn with TSMC pushing the Taiex over 20,300 points at one point, rising 322.47 in the mid-morning session, before some investors moved to the sell side to lock in part of their initial gains, capping the upturn by the end of the session, dealers added.

"TSMC, again, dominated the local main board as investors seized on its soaring ADRs as a reason to buy, boosting the spot market in a bid to profit in futures today, when May futures contracts were settled," Moore Securities Investment Consulting analyst Adam Lin said.

TSMC, the most heavily weighted stock on the local market, rose 1.70 percent to close at NT$839.00 after hitting a high of NT$844.00. TSMC's gains contributed 110 points to the Taiex's rise and sent the electronics index higher by 0.85 percent.

"The buying in tech stocks today simply followed a mixed U.S. PPI (producer price index) report for April," Lin said. "But, with the Taiex hitting a new record intraday high, it was no surprise that profit taking emerged to cap the gains."

The April U.S. PPI rose 0.5 percent from a month earlier, higher than the market estimate of 0.3 percent growth, but the March reading was revised from an initially reported 0.2 percent increase to a decline of 0.1 percent.

As TSMC drew much market attention, other semiconductor stocks seemed marginalized, Lin said.

United Microelectronics Corp., a smaller contract chipmaker, fell 0.58 percent to end at NT$51.80, while smartphone IC designer MediaTek Inc. closed unchanged at NT$1,155.00.

Coming in line with TSMC, IC packaging and testing services provider ASE Technology Holding Co. rose 1.34 percent to end at NT$151.00, and Global Unichip Corp, TSMC's application specific integrated circuit (ASIC) design subsidiary, gained 2.92 percent to close at NT$1,410.00.

Meanwhile, iPhone assembler Hon Hai Precision Industry Co. lost 0.87 percent to close at NT$151.00. "Investors seemed unhappy with Hon Hai's first quarter results after it booked large losses from its investments in Sharp," Lin said.

On Tuesday, Hon Hai, also known as Foxconn on the global markets, reported it posted NT$1.59 in earnings per share for the first quarter, well below an earlier market estimate of no less than NT$2.

"Futures-led buying also focused on the financial sector with investors impressed by its improving profitability and generous cash dividend payouts," Lin said.

In the financial sector, which rose 1.60 percent, Cathay Financial Holding Co. rose 4.24 percent to close at NT$56.60, Fubon Financial Holding Co. gained 3.65 percent to end at NT$73.80, CTBC Financial Holding Co. added 2.36 percent to close at NT$36.90, and Yuanta Financial Holding Co. ended up 1.27 percent at NT$31.85.

In the old economy sector, which appeared mixed, the electric machinery index fell 0.24 percent with Fortune Electric Co. falling 1.56 percent to close at NT$755.00 despite a move by MSCI to add the stock to the MSCI Global Standard Indexes.

In addition, Rexon Industrial Corp. also lost 1.80 percent to end at NT$46.50.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. gained 1.02 percent to close at NT$79.10, and rival AGV Products Corp. rose 1.23 percent to end at NT$12.30.

"The April U.S. consumer price index data (due Wednesday U.S. time) is worth watching as it is one of the favorites used by the Fed to assess inflation," Lin said.

"In addition, before the presidential inauguration on May 20, government-led funds could lend support to the equity market with tech and financial heavyweights in focus," Lin said.

According to the TWSE, foreign institutional investors bought a net NT$26.09 billion worth of shares on the main board Wednesday.