With TSMC surge, Taiwan shares end at another record high

Taipei, June 18 (CNA) Shares in Taiwan closed at another record high Tuesday, led by solid gains posted by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) after a rally among tech stocks on U.S. markets overnight, dealers said.

Optimism over artificial intelligence development worldwide prevailed, vaulting the local main board over the 22,700 point mark to close at almost the day's high, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 260.90 points, or 1.16 percent, at 22,757.43 after moving between 22,642.94 and 22,787.67. Turnover totaled NT$458.37 billion (US$14.16 billion).

The market opened up 0.86 percent and momentum continued with TSMC in focus as investors took their cue from a 0.95 percent increase on the tech-heavy Nasdaq index, which hit a new closing high after Apple Inc. shares rose 2 percent, dealers said.

At the end of the session, TSMC, the most heavily weighted stock on the local market, moved sharply higher by 2.39 percent to close at NT$943.00 after its American depositary receipts (ADRs) gained 2.74 percent overnight.

TSMC's gains contributed about 180 points to the Taiex's rise and sent the electronics index and semiconductor sub-index higher by 1.38 percent and 2.12 percent, respectively.

"Strong buying in TSMC largely reflected investors' hopes that the stock will be one of the major beneficiaries of the current AI boom," Hua Nan Securities analyst Kevin Su said.

"Such hopes have been raised by Apple's recent announcement on its AI efforts, which will extend applications from cloud to consumer electronic gadgets," Su said.

Last week, Apple announced a long-awaited foray into AI development at its annual developer conference, confirming devices such as its iPhones, iPads and Macs will be equipped with AI applications.

Su said optimism about AI development spread to TSMC-related stocks with TSMC's application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. soaring 9.09 percent to end at NT$1,680.00, and Scientech Corp., an equipment supplier to TSMC, adding 1.03 percent to close at NT$344.00.

On the over-the-counter market, TSMC related stocks also attracted buying with IC packaging and testing service provider Xintec Inc. rising 3.45 percent to end at NT$180.00.

Among other semiconductor heavyweights, smartphone IC designer MediaTek Inc. rose 1.81 percent to close at NT$1,405.00, while dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. gained 6.04 percent to end at NT$72.00 on foreign institutional buying over the previous three sessions.

Bucking the upturn, iPhone assembler Hon Hai Precision Industry Co., also known as Foxconn on the global market, lost 0.75 percent to close at NT$198.50 on a mild technical pullback, after ending at NT$200.00 for the first time in 16 years, up 1.01 percent Monday.

"The financial sector also served as a driver to the Taiex's gains today as investors were happy with an increase in asset value in the booming global stock and bond markets," Su said.

In the financial sector, which rose 1.32 percent, Cathay Financial Holding Co. rose 2.43 percent to close at NT$58.90, and Fubon Financial Holding Co. gained 1.32 percent to end at NT$79.00. In addition, SinoPac Financial Holding Co. added 2.70 percent to close at NT$24.70 and CTBC Financial Holding Co. ended up 1.74 percent at NT$37.90.

In the wake of a blackout reported in the Neihu Technology Park in Taipei Tuesday morning with Taiwan Power Co. citing power feeder problems behind the incident, Su said, investors rushed to buy into electric machinery stocks on hopes that Taipower will intensify efforts to strengthen its electricity grid network around the country.

With the electric machinery index rising 0.61 percent, Fortune Electric Co. Gained 4.42 percent to close at NT$945.00, and Allies Electric Co. gained 3.60 percent to end at NT$144.00. Meanwhile, Shihlin Electric & Engineering Corp. added 3.05 percent to close at NT$270.00, and Chung-Hsin Electric & Machinery Manufacturing Corp. ended up 2.17 percent at NT$188.00.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. lost 0.24 percent to close at NT$81.50, and rival Wei Chuan Foods Corp. ended unchanged at NT$18.75.

In addition, shares in textile supplier Far Eastern New Century Corp. rose 1.84 percent to close at NT$35.90, while Eclat Textile Co. ended down 0.94 percent at NT$527.00.

"Investors should keep a close eye on remarks to be made by several Fed officials later this week," Su said. "What they think about a possible rate cut could move the markets, in particular rate sensitive tech stocks."

Fed officials, including Boston Fed president Susan Collins, Dallas' Lorie Logan, and St. Louis' Alberto Musalem are set to speak this week.

According to the TWSE, foreign institutional investors shifted to the buy side, buying a net NT$17.83 billion worth of shares on the main board Tuesday after net sales of NT$13.54 billion on Monday.