Taiwan shares end up on TSMC, Hon Hai gains

Taipei, June 28 (CNA) Shares in Taiwan moved higher Friday as the main board jumped over technical hurdles ahead of the 23,000 point mark by the end of the session, dealers said.

The two largest cap stocks -- contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co. -- posted gains and served as an anchor for the broader market with investors ignoring the mixed performance by tech stocks on U.S. markets overnight, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 126.27 points, or 0.55 percent, at 23,032.25 after moving between 22,896.72 and 23,142.40. Turnover totaled NT$435.91 billion (US$13.43 billion).

The market opened down 9.26 points at the day's low, but soon regained its footing as buying featured tech heavyweights such as TSMC and Hon Hai amid continued optimism toward artificial intelligence development despite mixed U.S. markets, where the tech-heavy Nasdaq index rose 0.30 percent but the Philadelphia Semiconductor Index lost 0.57 percent on Thursday, dealers said.

Along with the strength enjoyed by select old economy stocks such as electric machinery suppliers as well as financial stocks, the bellwether electronics sector led the broader market to close higher, dealers added.

"Buying in Hon Hai was seen almost throughout the session and TSMC reversed its earlier losses in the early morning session," Capital Investment Management analyst Liao Chien-yu said. "It seemed that investors wanted to use the two largest cap stocks to maintain the Taiex's strength, helping the main board climb out of yesterday's weakness and end above 23,000 points."

On Thursday, the Taiex fell 0.35 percent.

"The gains enjoyed by TSMC and Hon Hai reflected continued market hopes about artificial intelligence development, although shares in U.S.-based AI chip designer Nvidia moved lower (by 1.91 percent) overnight," Liao said.

TSMC, Hon Hai

TSMC, which is believed to supply chips made on its advanced processes to Nvidia, rose 0.62 percent to close at NT$966.00 after coming off a low of NT$955.00. The initial losses for TSMC shares came after a 0.26 percent fall in its American depositary receipts on Thursday.

TSMC's gains contributed about 50 points to the Taiex's rise and boosted the electronics index and semiconductor sub-index by 0.67 percent and 0.54 percent, respectively.

Hon Hai, also known as Foxconn on global markets, which has forecast its AI server sales will rise more than 40 percent in 2024, gained 0.71 percent to end at NT$214.00.

Interest in TSMC spread to other semiconductor stocks with smartphone IC designer MediaTek Inc. up 0.36 percent to close at NT$1,400.00 and Scientech Corp., a production equipment supplier to TSMC, up 2.17 percent to end at NT$353.50.

Riding the wave of the AI frenzy, AI server maker Quanta Computer Inc. rose 2.30 percent to close at NT$312.00, but rival Wistron Corp. lost 0.47 percent to end at NT$106.00.

"With Nvidia CEO Jensen Huang saying robots are the next wave of AI applications, Taiwan's robot stocks also attracted strong buying today," Liao said. Among them, Solomon Technology Corp. soared 10 percent, the maximum daily increase, to NT$166.00. Quanta Storage Inc., Solomon's counterpart on the over-the-counter (OTC) market, also surged 10 percent to end at NT$111.00.

The tech sector stayed in the market spotlight today, while non-tech industries appeared mixed, dealers said.

Non-tech sectors

The steel industry fell 0.63 percent with Tung Ho Steel Corp. down 1.14 percent to close at NT$69.60, Evergreen Steel Corp. down 1.76 percent to end at NT$139.50, and Century Iron and Steel Industrial Co. down 7.08 percent to close at NT$302.00. Bucking the downturn, China Steel Corp., the largest steel maker in Taiwan, rose 0.22 percent to end at NT$23.10.

The tourism index lost 0.45 percent after the Mainland Affairs Council on Thursday raised its travel alert for China, Hong Kong and Macau to the second-highest orange alert with immediate effect, advising Taiwanese citizens to avoid unnecessary travel to these regions due to increasing safety concerns.

Among falling tourism stocks, Lion Travel Services Corp. suffered relatively heavier losses, down 2.30 percent to close at NT$148.50, on the main board. On the OTC market, Ezfly International Travel Agent Co. lost 1.59 percent to end at NT$37.25.

Elsewhere in the old economy sector, the electric machinery index rose 0.61 percent with Fortune Electric Co. up 2.16 percent to close at NT$945.00 and Teco Electric & Machinery Co. up 2.49 percent to end at NT$53.50.

In the financial sector, which rose 0.51 percent, Fubon Financial Holding Co. gained 1.15 percent to close at NT$79.30, while Cathay Financial Holding Co. dropped 0.17 percent to end at NT$59.00.

Taiex in consolidation

"The Taiex remains in consolidation mode despite today's gains," Liao said. "Whether the main board will stay well above 23,000 points will depend on how TSMC and Hon Hai move," Liao said.

The U.S. markets will play a critical role when it comes to movements in Taiwan, Liao said, citing the May Personal Consumption Expenditure Price Index (PCE), one of the favorite indexes when the Fed considers how to adjust monetary policy, which will be released Friday U.S. time and could move the market movements.

According to the TWSE, foreign institutional investors bought a net NT$8.899 billion worth of shares on the main board Friday.