Taiwan shares soar over 300 points amid AI frenzy

Taipei, June 3 (CNA) Shares in Taiwan moved sharply higher Monday, sparked by enthusiasm over artificial intelligence development after a speech delivered by Jensen Huang, CEO of U.S. AI chip designer Nvidia Corp., in Taipei a day earlier, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which is believed to provide advanced chips for Nvidia's graphics processing units (GPUs), led the gains throughout the session, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 362.54 points, or 1.71 percent, at 21,536.76 after moving between 21,372.08 and 21,612.54. Turnover totaled NT$433.32 billion (US$13.38 billion).

The market opened up 1.01 percent, with TSMC and other AI-related stocks steaming ahead after getting a boost from Huang's speech, in which he described AI as the driving force of a new worldwide industrial revolution, dealers said.

The bellwether electronics sector kept the market strong for most of the session before technical resistance ahead of 21,600 points let some air out of the Taiex late, dealers said. The electronics sector accounted for about 66 percent of Monday's total turnover.

TSMC, the most heavily weighted stock in the local market, rose 3.05 percent to close at NT$846.00. TSMC's gains contributed about 200 points alone to the Taiex's rise Monday and sent the electronics index and semiconductor sub-index higher by 2.30 percent and 2.69 percent, respectively.

"AI enthusiasm was renewed by Huang's speech, prompting the local market to recover from weakness last week caused by index adjustments by MSCI," MasterLink Securities analyst Tom Tang said.

"AI-driven buying, in particular, helped TSMC recoup its losses of last week, helping the Taiex return to the 20-day moving average of 21,200 points," Tang said.

After the latest index adjustments, TSMC suffered the steepest weighting cut of 0.2 percentage points in weighting to 47.77 percent among the 88 constituents of the MSCI Taiwan Index.

In addition to TSMC, other AI suppliers also attracted strong buying, with iPhone assembler and AI server supplier Hon Hai Precision Industry Co. closing 2.62 percent higher at NT$176.50.

Quanta Computer Inc., another AI server supplier, rose 3.10 percent to close at NT$282.50, and rival Wistron Corp. added 1.79 percent to end at NT$114.00.

PC brands Asustek Computer Inc. closed down 0.78 percent at NT$509.00 on profit taking, off a high of NT$527.00, and Acer Inc. ended down 0.76 percent at NT$52.50, after hitting a high of NT$54.60.

Among other Nvidia semiconductor partners, smartphone IC designer MediaTek Inc. rose 2.83 percent to close at NT$1,270.00, and IC packaging and testing services provider ASE Technology Holding Co. gained 2.55 percent to end at NT$161.00.

"Despite the gains in Taiex, turnover failed to expand significantly. I think many investors preferred to stay on the sidelines, waiting for the real numbers to be released by these AI-related stocks later this year," Tang said. "That's why the market failed to sustain all of its early gains today."

Tang said non-tech stocks appeared mixed as many of them were marginalized by the strong gains enjoyed by their tech counterparts.

"But I still saw strong rotational interest in shipping and construction stocks during the session," Tang said.

In the transportation sector, which rose 1.73 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 2.38 percent to close at NT$215.50.

Rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. gained 6.15 percent and 2.89 percent, respectively, to end at NT$75.90 and NT$82.00.

Elsewhere in the transportation sector, however, China Airlines fell 1.12 percent to close at NT$22.15, and EVA Airways lost 1.26 percent to end at NT$35.35 due to an ongoing freeze on group tour travel between China and Taiwan.

The construction industry rose 1.94 percent on rising home sales. King's Town Construction Co. surged 10 percent, the maximum daily increase, to close at NT$58.90, and Radium Life Tech Co. rose 5.09 percent to end at NT$11.35.

In the financial sector, which rose 0.59 percent, CTBC Financial Holding Co. gained 2.82 percent to close at NT$36.40, and Cathay Financial Holding Co. added 0.54 percent at NT$56.70.

"I expect the Taiex will continue to move between 21,200 and 21,800 points in the short term, and the U.S. markets are likely to dictate which way the Taiex will go," Tang said.

"Investors should keep a close eye on what the Federal Reserve does at its next policymaking meeting," Tang said, referring to the meeting scheduled for June 11-12 U.S. time.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$2.90 billion in shares Monday.