Taiwan shares edge up as TSMC recoups earlier losses

Taipei, May 20 (CNA) Shares in Taiwan closed slightly higher Monday as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) climbed out of its earlier weakness to vault the broader market back into positive territory, dealers said.

Although the bellwether electronics sector appeared mixed, buying rotated to financial heavyweights and select old economy stocks providing further support to the broader market, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 13.16 points, or 0.06 percent, at 21,271.63 after moving between 21,102.18 and 21,338.35. Turnover totaled NT$444.03 billion (US$13.77 billion).

The market opened up 19.91 points and moved to the day's high in the early morning session on a technical rebound from a session earlier, when the Taiex ended down 0.21 percent, dealers said.

Selling set in after 11 a.m. pushing the main board down to a low as President Lai Ching-te's inauguration speech delivered no surprises to the market, before bargain hunters jumped in to pick up TSMC in the late trading session, helping the Taiex recoup all its earlier losses, dealers added.

"While Lai's speech failed to offer any surprises to boost the market, investors shifted their attention back to fundamentals with the Taiex staying in consolidation mode," Cathay Futures Consultant analyst Tsai Ming-han said.

"Fortunately, TSMC recovered from its low, prompting the Taiex to return to positive territory" Tsai said. "I think the stock has seen strong support ahead of NT$820.00, the 10-day moving average."

TSMC, the most heavily weighted stock on the market, closed unchanged at NT$835.00 after hitting a low of NT$822.00. As the stock came off a low, the electronics index closed at 0.04 percent at 1,105.48, off a low of 1,094.63.

"The entire electronics sector as a whole moved in a narrow range as tech stocks on U.S. markets remained in consolidation despite the Dow Jones Industrial Average closing at a new high to top 40,000 points," Tsai said.

iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, lost 1.47 percent to end at NT$167.50, and artificial intelligence server maker Quanta Computer Inc. dropped 1.40 percent to close at NT$282.00. In addition, PC brand Asustek Computer Inc. ended down 1.94 percent at NT$506.00.

Also in the semiconductor industry, United Microelectronics Corp., a smaller contract chipmaker, rose 0.57 percent to close at NT$53.10, and smartphone IC designer MediaTek Inc. gained 2.15 percent to end at NT$1,190.00.

Due to worries over the performance of U.S. tech stocks down the road, Tsai said, the local electronics sector accounted for less than 60 percent of total turnover, lower than the recent peak of over 70 percent, as investors refrained from buying.

"Buying continued to rotate to non-tech stocks," Tsai said. "Today, the financial sector attracted relatively strong buying and with its heavy weighting the Taiex received another boost."

In the financial sector, which rose 0.48 percent, shares in Shanghai Commercial & Savings Bank rose 3.04 percent to close at NT$47.50, E. Sun Financial Holding Co. gained 1.38 percent to end at NT$29.40, and CTBC Financial Holding Co. added 1.18 percent to close at NT$38.55. Bucking the upturn, Fubon Financial Holding Co. ended down 1.07 percent at NT$73.80.

"Such rotational buying was also seen among select old economy stocks. Today, the steel industry was highlighted," Tsai said.

The steel index rose 0.99 percent with China Steel Corp., the largest steel maker in Taiwan, rising 0.80 percent to close at NT$25.25 and Hung Ho Steel Corp. gaining 1.30 percent to end at NT$69.90. In addition, Yieh Hsing Enterprise Co. soared 10 percent, the maximum daily increase, to close at NT$12.95, and Chung Hung Steel Corp. ended up 2.18 percent at NT$23.45.

Elsewhere in the old economy sector, Asia Cement Corp. rose 1.91 percent to close at NT$45.45, and Universal Cement Corp. gained 2.25 percent at NT$34.05, while textile brand Far Eastern New Century Corp. fell 0.72 percent to close at NT$34.45, and Formosa Plastics Corp. ended down 0.29 percent at NT$68.10.

"Market sentiment stayed cautious ahead of an investor conference by American AI chip designer Nvidia Corp. later this week. Investors are likely to take to the sidelines before that," Tsai said. Nvidia's investor conference is scheduled for Wednesday U.S time.

"Despite the expected consolidation, I expect the Taiex will see solid technical support ahead of 21,190 points, the five-day moving average," Tsai added.

According to the TWSE, foreign institutional investors sold a net NT$6.50 billion worth of shares on the main board Monday.