Taiwan shares end up as large-cap tech stocks bounce back

Taipei, June 5 (CNA) Taiwan shares closed up, moving closer to the 21,500-point mark on Wednesday as select tech heavyweights staged a technical rebound from weakness a session earlier amid continuing enthusiasm about global artificial intelligence development, dealers said.

Besides the tech sector, large-cap shipping stocks continued rising after Copenhagen-based container shipping giant Maersk raised its profit forecast for 2024 a second time, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 128.26 points, or 0.60 percent, at 21,484.88 after moving between 21,264.63 and 21,510.86. Turnover totaled NT$400.92 billion (US$12.39 billion).

The market opened up 0.13 percent as part of a technical rebound, following a 0.84 percent slump seen on Tuesday. Buying accelerated as tech giants related to AI development returned to the market spotlight, dealers said.

Along with the significant gains posted by shipping stocks, the bellwether electronics sector, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co., sustained the upturn on the broader market until the end of the session, dealers added.

"The AI frenzy kept boosting large tech stocks," Hua Nan Securities analyst Kevin Su said. "Today, in particular, Hon Hai was highlighted, while TSMC also got a boost from late buying."

After falling 0.83 percent on Tuesday, TSMC, the most heavily weighted stock in the local market, rose 1.79 percent to close at NT$854.00 Wednesday, off a low of NT$835.00.

"TSMC has taken the lead over its peers in developing high-end processes used in AI applications. I expect the stock will soon challenge NT$530.00 (the intraday high on May 30) and carry on steaming ahead," Su said.

Hon Hai, second to TSMC in terms of market value and also an AI server supplier, gained 2.63 percent to end at NT$175.50, reversing a 3.12 percent decline a session earlier, after the company announced a plan to team up with U.S.-based AI chip designer Nvidia Corp. to set up an advanced computing center in Kaohsiung, Su said.

Led by TSMC and Hon Hai, the electronics index and semiconductor sub-index rose 0.81 percent and 1.19 percent, respectively.

Other AI-related stocks appeared mixed with Quanta Computer Inc., another AI server maker, adding 0.55 percent to close at NT$276.50, while rival Wistron Corp. ended down 0.44 percent at NT$112.00.

In addition, Giga-Byte Technology Co., a leading graphics card vendor for AI applications, rose 0.95 percent to close at NT$318.00, but Wistron's cloud application subsidiary, Wiwynn Corp., dropped 0.39 percent to end at NT$2,525.00.

In the semiconductor industry, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, gained 2.93 percent to close at NT$1,580.00 after a foreign brokerage raised a target price on the stock from NT$1,600.00 to NT$1,830.00.

"While the tech sector led to the Taiex moving higher, shipping stocks provided an additional boost as container cargo freight rates continued increasing amid escalating geopolitical tensions," Su said.

Growing geopolitical unease prompted Maersk to raise its 2024 earnings outlook as a sign that the Red Sea crisis wasn't close to slowing down anytime soon.

After Maersk's move, the local transportation index soared 3.21 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rising 2.84 percent to close at NT$217.00 and rival Yang Ming Marine Transport Corp. rising 6.21 percent to end at NT$80.40. Wan Hai Lines Ltd. soared 10 percent, the maximum daily increase, to close at NT$88.00.

Buying spread to bulk cargo shipping stocks with Sincere Navigation Corp. up 3.38 percent to close at NT$32.10, and U-Ming Transport Corp. up 2.75 percent to end at NT$59.80.

Su said select biotech stocks attracted buying on the hope they would benefit from the government's efforts to cultivate the industry. Oncology and specialty generics drug developer Lotus Pharmaceutical Co. rose 2.45 percent to close at NT$292.50, and test kit supplier Panion & BF Biotech Inc. gained 1.77 percent to end at NT$97.80.

Elsewhere in the old economy sector, Formosa Plastics Corp. lost 1.73 percent to close at NT$62.60 and Nan Ya Plastics Corp. dropped 1.35 percent to end at NT$51.00. Meanwhile, textile brand Far Eastern New Century Corp. lost 0.59 percent to close at NT$33.80, while Eclat Textile Co. added 1.63 percent to end at NT$499.50.

In the financial sector, which rose 0.23 percent, Fubon Financial Holding Co. rose 0.54 percent to close at NT$74.00 and E. Sun Financial Holding Co. ended up 0.88 percent at NT$28.60, while CTBC Financial Holding Co. lost 0.14 percent to close at NT$36.30.

"Investors remained wary of what the U.S. Federal Reserve will do next as they await the upcoming policymaking meeting slated for next week," Su said.

"Before the meeting, U.S. non-farm payroll data (due on Friday) deserves attention from those trying to ascertain when the Fed will begin a rate cut cycle," Su added, noting the market widely predicts the cycle will start in September.

Despite the Taiex gains, foreign institutional investors sold a net NT$18.72 billion worth of shares on the main board Tuesday, according to the TWSE.