Taiex soars almost 700 points as TSMC rebounds

Taipei, Aug. 9 (CNA) Taiwan shares moved sharply higher Friday morning as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) regained its footing following the gains posted by its American depositary receipts (ADRs) overnight, dealers said.

As of 11:25 a.m., the Taiex, the Taiwan Stock Exchange's benchmark weighted index, had risen 681.97 points, or 3.27 percent, to 21,552.07, bouncing back from a 2 percent fall a session earlier.

The rally came as TSMC, the most heavily weighted stock in Taiwan, had gained 3.79 percent to NT$930.00 (US$28.75) on buying sparked by a 6.13 percent spike in its ADRs on U.S. markets overnight.

On Thursday, TSMC plunged 2.61 percent, sending the Taiex into a tailspin amid volatility in the United States caused by fears of a possible recession there.

TSMC's gains had contributed about 275 points to the Taiex's rise Friday as of 11:25 a.m. and helped the electronics index and semiconductor sub-index rise 3.45 percent and 3.76 percent, respectively.

TSMC is scheduled to release its July sales data after the stock market closes Friday.

Dealers said buying in the local tech sector came after a comeback on U.S. markets Thursday, when the Dow Jones Industrial Average rose 1.76 percent and the tech-heavy Nasdaq index added 2.87 percent.

Those advances were helped by positive economic news in the U.S. The latest weekly jobless claims fell to 233,000, lower than the 240,000 forecast, easing worries about the U.S. economy.

Also in the local tech sector, smartphone IC designer MediaTek Inc. had risen 2.24 percent to NT$1,140.00, and iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, had gained 4.59 percent to NT$171.00 as of 11:25 a.m.

Dealers said improved market sentiment also prompted investors to chase old economy and financial stocks, adding momentum to the broader market.

As of 11:25 a.m., Formosa Plastics Corp. had risen 2.63 percent to NT$54.70, and Nan Ya Plastics Corp. had gained 1.94 percent to NT$47.30. In addition, China Steel Corp., the largest steel maker in Taiwan, had added 1.18 percent to NT$22.50.

In the financial sector, Fubon Financial Holding Co. had risen 3.85 percent to NT$86.30, and Cathay Financial Holding Co. had gained 5.36 percent to NT$60.90.

Dealers said the local stock market is expected to continue to be dictated by markets in the U.S., with economic data expected to continue to drive market fluctuations.