Taiwan shares end sharply higher as TSMC hits day's high

Taipei, Aug. 16 (CNA) Shares in Taiwan moved higher Friday after markets in the United States rallied overnight because of better-than-expected U.S. economic data on retail sales and jobless claims, dealers said.

The bellwether electronics sector again spurred market momentum, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which closed at its high for the day.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 454.16 points, or 2.07 percent, at 22,349.33 after moving between 22,114.72 and 22,374.94. Turnover totaled NT$416.03 billion (US$12.87 billion).

The market opened up about 1.0 percent and continued to pick up momentum, helped by large-cap electronics stocks, in particular TSMC, following a 1.39 percent increase in the Dow Jones Industrial Average and a 2.34 percent rise in the tech-heavy Nasdaq index Thursday.

That strength remained to the end of the session, by which time TSMC had risen 2.76 percent to close at its high of NT$969.00 following a 2.35 rise in its American depositary receipts (ADRs) overnight.

TSMC's gains contributed about 210 points to the Taiex's increase and helped the electronics index and semiconductor sub-index gain 2.47 percent and 2.87 percent, respectively.

"The strong rebound in Taiwan and the United States simply reflected that markets were oversold amid worries about a possible hard landing of the U.S. economy," Moore Securities Investment Consulting Co. analyst Adam Lin said.

"The latest U.S. retail sales and jobless claims data eased the downbeat sentiment and encouraged investors to pick up bargains throughout the session," Lin said.

U.S. retail sales rose 1 percent in July, beating an estimate of a 0.4 percent rise, while the latest jobless claims fell to a seasonally adjusted 227,000 for the week ending Aug. 10, beating estimates of 235,000.

"In the wake of the solid gains among tech stocks on U.S. markets, investors did not appear hesitant to buy into TSMC and other tech heavyweights," Lin said.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 6.49 percent to end at NT$1,230.00, and United Microelectronics Corp., a smaller contract chipmaker, gained 2.01 percent to close at NT$55.80.

Dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. also added 2.01 percent to end at NT$55.70.

After U.S.-based artificial intelligence chip designer Nvidia Corp. rose 4.05 percent overnight, Taiwan's AI-related stocks followed suit.

AI server maker Quanta Computer Inc. closed 2.58 percent higher at NT$278.50, cloud application supplier Wiwynn Corp. rose 5.19 percent to end at NT$2,025.00, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, gained 6.21 percent to close at NT$265.00.

The stock with the second highest market cap in Taiwan, iPhone assembler and AI server maker Hon Hai Precision Industry Co., gained 1.66 percent to end at NT$184.00.

"Improved sentiment also led investors to turn their attention to non-tech stocks, many of which had been undervalued," Lin said.

In a strong technical comeback of 3.29 percent in the textile industry, Eclat Textile Co. gained 6.76 percent to close at NT$529.00, and Makalot Industrial Co., Ltd. added 2.41 percent to end at NT$382.00.

In addition, Far Eastern New Century Corp., another textile brand, rose 3.95 percent to close at NT$36.85.

The construction sector also posted solid gains, rising 2.27 percent, on expectations that many property developers will book large sales in the second half of 2024.

Sino Horizon Holdings Ltd. soared 7.05 percent to end at NT$31.90, Highwealth Construction Corp. rose 6.00 percent to close at NT$58.30, and Huaku Development Co. added 5.03 percent to end at NT$156.50.

In the financial sector, which rose 1.97 percent, Fubon Financial Holding Co. closed 3.82 percent higher at NT$92.40, and Cathay Financial Holding Co. ended up 2.27 percent at NT$63.00.

"The Taiex still lags behind the Nasdaq index, which is highly correlated with local electronics stocks, so it is possible the market will continue to play catch up," Lin said.

"TSMC has become technically healthier, and the stock could lead the Taiex higher and challenge the stiff technical resistance ahead of the 60-day moving average of 22,420 points soon."

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$45.39 billion in shares on the market Friday.