Taiwan shares end at new high following 'Apple concept stock' gains

Taipei, June 12 (CNA) Shares in Taiwan moved sharply higher by more than 250 points to close at a record high Wednesday, breaching the 22,000 point mark, as "Apple concept stocks" steamed ahead after Apple Inc. shares soared 7 percent on the U.S. markets overnight, dealers said.

Despite the surge, investors should keep a close eye on the ongoing U.S. Federal Reserve policymaking meeting, the outcome of which could impact the global financial markets, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 256.84 points, or 1.18 percent, at 22,048.96 after moving between 21,841.81 and 22,094.94. Turnover totaled NT$447.55 billion (US$13.83 billion).

Apple's AI development

The market opened up 0.23 percent and momentum accelerated with Apple's suppliers, particularly contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), amid optimism that the American consumer electronics giant was set to benefit from its efforts in artificial intelligence development, dealers said.

The strength continued until the end of the session, which helped the local main board end up from the previous closing high of 21,902.70 recorded on June 6, dealers added.

"Thanks to soaring Apple shares overnight, suppliers in Taiwan, so-called 'Apple concept stocks' attracted strong buying throughout the session which led to the Taiex surpassing technical resistance ahead of 22,000 points," Mega International Investment Services Corp. analyst Alex Huang said.

Apple shares saw significant gains and hit a record high at the close on Tuesday after the company announced a long-awaited foray into AI development at its annual developer conference on Monday.

"The announcement confirmed Apple's devices such as iPhone, iPad and Mac will be equipped with AI applications, which will probably result in consumers replacing their old devices. This is good news for suppliers," Huang said.

"TSMC is expected to be one of the biggest winners as it is said to serve as a major chip supplier to Apple and it was no surprise that its shares moved sharply higher, pushing up the Taiex today," Huang said.

TSMC, the most heavily weighted stock in the local market, rose 2.94 percent to close at a new high of NT$909.00. The stock's gains contributed about 212 points to the Taiex rise and sent the electronics index and semiconductor sub-index higher by 2.00 percent and 2.47 percent, respectively.

Among other major Apple concept stocks, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, rose 3.88 percent to end at NT$187.50, and smartphone camera lens maker Largan Precision Co. grew 6.55 percent to close at NT$2,360.00.

Genius Electronic Optical Co., another smartphone camera lens supplier to Apple, soared 8.44 percent to end at NT$591.00 and IC packaging and testing services provider ASE Technology Holding Co. added 1.56 percent to close at NT$162.50.

Also in the electronics sector, smartphone IC designer MediaTek Inc. rose 2.36 percent to end at NT$1,300.00. Meanwhile, AI server supplier Quanta Computer Inc. closed unchanged at NT$274.50, and United Microelectronics Corp., a smaller contract chipmaker, ended down 0.36 percent at NT$54.90.

Old economy sector

"With these Apple suppliers under the spotlight, non-tech stocks performed less well," Huang said. "Today, the construction industry continued a downtrend amid fears that the local central bank will announce more lending restrictions to stop manipulation in the home market."

Ahead of a quarterly policymaking meeting scheduled by the central bank for Thursday, the construction index lost 1.41 percent with Cathay Real Estate Development Co. down 4.47 percent to close at NT$31.20 and King's Town Construction Co. down 3.13 percent to end at NT$55.70. In addition, Crowell Development Corp. lost 4.62 percent to close at NT$46.50, and Highwealth Construction Corp. ended down 1.33 percent at NT$48.30.

Elsewhere in the old economy sector, Formosa Plastics Corp. lost 0.98 percent to close at NT$60.90, and Nan Ya Plastics Corp. dropped 1.38 percent to end at NT$50.10.

Meanwhile, food brand Uni-President Enterprises Corp. rose 1.65 percent to close at NT$80.30, and Lian Hwa Foods Corp. gained 0.99 percent to end at NT$102.50 following hopes that increasing spending during the summer vacation period would boost sales.

In the financial sector, which fell 0.58 percent, Fubon Financial Holding Co. lost 1.68 percent to close at NT$76.00, and Cathay Financial Holding Co. ended down 1.36 percent at NT$57.90.

Fed watch

"Today's strong showing fails to alleviate my concerns given the Fed will wrap up its two-day policymaking meeting early Thursday morning (Taipei time)," Huang said. "I am worried the Fed will make hawkish comments regarding its monetary policy which will affect the global markets including Taiwan."

"In addition, the Taiex could pull back as it is moving closer to the next technical hurdle which sits at around 22,217 points," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$16.82 billion of shares on the main board Wednesday.