Taiwan shares end up as TSMC gains

Taipei, July 16 (CNA) Shares in Taiwan closed higher on Tuesday with the bellwether electronics sector making gains, led by chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) ahead of its investor conference scheduled for Thursday, dealers said.

Buying was also sparked on reinforced hopes of a rate cut by the U.S. Federal Reserve as early as September after Chair Jerome Powell made dovish comments at an economic forum in Washington overnight, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 117.89 points, or 0.49 percent, at 23,997.25 after moving between 23,861.77 and 24,174.18 during the session. Turnover totaled NT$467.05 billion (US$14.32 billion).

The market opened almost unchanged, up only 0.97 points, and moved in a narrow range at first. But buying accelerated in the mid-morning session as investors rushed to pick up TSMC, pushing the index up to the day's high by almost 300 points.

But as the index breached 24,100 points, some investors began pocketing their gains, eroding the upturn. However, buying of TSMC remained strong in the late trading session, sending the main board up more than 110 points by the end of the day's trading.

"Judging from today's movements, I think the main board faced stiff technical resistance ahead of 24,000 points, forcing the Taiex to give up part of its earlier gains," Mega International Investment Services Corp. analyst Alex Huang said.

Huang said the initial upturn came after the Dow Jones Industrial Average stood above 40,000 points overnight after Powell had hinted that the Fed will not wait until inflation slows to the 2 percent level to cut interest rates.

"The silver lining was that TSMC continued to trend higher as many investors stayed upbeat that the chipmaker will send positive signals at its investor conference," Huang said.

"TSMC, again, served as an anchor stabilizing the Taiex, though the index failed to sustain all of its earlier gains and stay above the 24,000 point threshold by the end of the session," Huang added.

TSMC, the most heavily weighted stock in the local market, rose 1.44 percent to close at NT$1,058.00. The stock's gains contributed about 120 points to the Taiex's rise and sent the electronics index and semiconductor sub-index higher by 0.80 percent and 1.10 percent, respectively.

"Other semiconductor heavyweights, however, retreated from their recent strong rally," Huang said, referring to the stocks including smartphone IC designer MediaTek Inc., which fell 0.74 percent to end at NT$1,345.00, and IC packaging and testing services provider ASE Technology Holding Co., which closed down 0.28 percent at NT$179.00.

In addition, iPhone assembler Hon Hai Precision Industry Co., second only to TSMC in terms of market value, shed 1.62 percent to end at NT$213.00.

"As buying rotated out of stocks like Hon Hai, investors sought other tech stocks in the electronics component industry by taking advantage of their relatively low valuations," Huang explained.

Among them, Yageo Corp., the world's third largest multilayer ceramic capacitor (MLCC) supplier, rose 4.15 percent to close at NT$804.00, and printed circuit board maker WUS Printed Circuit Co. grew 2.04 percent to end at NT$55.10.

"With the tech sector stealing much of the spotlight, old economy and financial stocks largely made losses," Huang said. "However, the construction industry was an exception, playing catch-up with its tech counterpart."

In the construction industry, which rose 1.73 percent overall, Highwealth Construction Corp. increased 5.23 percent to close at NT$64.40, and Huang Hsiang Construction Corp. gained 2.86 percent to end at NT$64.80.

In addition, Cathay Real Estate Development Co. added 2.14 percent to close at NT$31.05, and Goldsun Building Materials Co. ended up 2.07 percent at NT$46.95.

Elsewhere in the old economy sector, Nan Ya Plastics Corp. lost 1.51 percent to close at NT$48.90, and Taita Chemical Co. shed 1.78 percent to end at NT$19.35.

Meanwhile, food brand Uni-President Enterprises Corp. fell 1.85 percent to close at NT$84.90, while Wei Chuan Foods Corp. ended unchanged at NT$18.50.

The petrochemical index and the food index lost 0.39 percent and 0.95 percent, respectively.

The financial sector lost 0.07 percent, with CTBC Financial Holding Co. down 0.80 percent to close at NT$37.35. Fubon Financial Holding Co. rose 0.88 percent to end up at NT$91.70.

"Technical hurdles remain high ahead of the 24,000 point mark, so I suggest investors lock in their gains when the index hits that level," Huang said. "Further volatility is possible, and if the main board fails to sustain its gains above 23,360, an intra-day low on July 4, more losses will follow."

According to the TWSE, foreign institutional investors sold a net NT$5.63 billion worth of shares on the main board on Tuesday.