Taiwan shares sharply rebound as TSMC soars

Taipei, July 23 (CNA) Shares in Taiwan staged a major rebound Tuesday morning after slumping a day earlier as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) surged after a rally of tech stocks on markets in the United States overnight, dealers said.

As of 10:36 a.m., the Taiex, the Taiwan Stock Exchange's benchmark weighted index, had risen 471.29 points, or 2.04 percent, to 22,728.28 after a 2.68 percent plunge on Monday. Turnover was at NT$218.30 billion (US$6.66 billion).

TSMC, the market's most heavily weighted stock, had jumped 3.09 percent to NT$968.00, contributing about 230 points alone to the Taiex's rise and sending the electronics index and semiconductor sub-index higher by 2.48 percent and 2.87 percent, respectively.

The market opened up 1.16 percent and momentum continued as investors backed large-cap tech stocks, which were hammered Monday on unease over former U.S. President Donald Trump potentially regaining the White House after incumbent Joe Biden dropped out of the race, dealers said.

"Judging from a rally on the U.S. markets overnight, I think investors in the United States appeared calm after Biden's withdrawal," Concord Capital Management analyst Lu Chin-wei said.

On Monday, the Dow Jones Industrial Average rose 0.32 percent, while the tech-heavy Nasdaq index and the Philadelphia Semiconductor Index rose by 1.58 percent and 4.00 percent, respectively.

"The strong showing of tech stocks, in particular in the semiconductor industry, on the U.S. markets overnight encouraged investors here to pick up stocks like TSMC," Lu said.

"I think negative non-economic factors impacting TSMC have been absorbed and investors are now returning to its sound fundamentals."

Last week, TSMC forecast that its sales will rise 24-26 percent in U.S. dollar terms in 2024, slightly more optimistic than an earlier estimate of 21-26 percent sales growth made in April.

Interest in TSMC extended to other semiconductor heavyweights, with smartphone IC designer MediaTek Inc. up 2.04 percent at NT$1,250.00 and IC packaging and testing services provider ASE Technology Holding Co. up 5.49 percent at NT$173.00 as of 10:36 a.m.

In addition, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, had risen 3.90 percent to NT$200.00 and contract notebook computer maker Quanta Computer Inc. had gained 1.91 percent to NT$293.50.

The two companies are major players in AI server production and have seen their stocks make major gains in recent months.

Lu said the financial sector also steamed ahead, up 1.29 percent as Fubon Financial Holding Co. had risen 2.66 percent to NT$84.80 and Cathay Financial Holding Co. had gained 2.00 percent to NT$61.20 as of 10:36 a.m.

In the old economy sector, Shihlin Electric & Engineering Corp. had added 3.21 percent to NT$282.00, and Chung-Hsin Electric & Machinery Manufacturing Corp. had gained 2.15 percent to NT$214.00.

"The Taiex seemed to see strong technical support at around 22,200 points after yesterday's plunge," Lu said.

"I expect bargain hunting will continue before the Taiex moves closer to the nearest technical resistance at around 23,400 points in the near term."