Taiwan shares stage continued rebound led by large tech stocks

Taipei, Sept. 6 (CNA) Shares in Taiwan continued their momentum Friday from a session earlier, rising more than 240 points, from a plunge of almost 1,000 points on Wednesday, with buying focused on large cap tech stocks, dealers said.

However, turnover on the local main board remained low as many investors took to the sidelines, waiting for the release of the U.S. nonfarm payroll data later in the day for more clues about the state of the American economy, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 247.48 points, or 1.17 percent, at 21,435.19 after moving between 21,125.14 and 21,461.71. Turnover totaled NT$268.25 billion (US$8.39 billion).

The market opened up 0.32 percent and the uptrend continued to push up the Taiex to the day's high, rising 274 points in the mid-morning session as tech heavyweights, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), served as a driver to the broader market, dealers said.

The strength on the local main board continued until the end of the trading session as buying spread to the financial sector with investors ignoring the mixed messages from U.S. markets, where the Dow Jones Industrial Average lost 0.54 percent and the tech-heavy Nasdaq index rose 0.25 percent, dealers added.

"Today's buying largely came as many bargain hunters wanted to take advantage of the tumble on Wednesday," MasterLink Securities analyst Tom Tang said.

Tang said the Taiex only staged a mild rebound of 94.96 points or 0.45 percent on Thursday after a dive of 999.46 points, or 4.52 percent on Wednesday, so many investors remained willing to pick up bargains Friday.

On Wednesday, the Taiex suffered the third steepest daily fall in history amid growing worries over the possible hard landing of the U.S. economy.

Overnight, the United States reported its smallest monthly job growth since January 2021, according to new data from ADP, although Washington reported slightly fewer Americans filed a new claim for jobless benefits last week.

"The job data remained contradictory so even when buying continued today on the local main board, turnover stayed low as many investors stayed on the sidelines before the August nonfarm payroll data comes out later today," Tang said.

"Due to the low turnover, the Taiex still traded in a narrow range with the nearest stiff technical resistance ahead of 21,600 points, the 120-day moving average," he said.

Tang said the strong showing on the main board on Friday largely reflected a rebound by TSMC, the most heavily weighted stock on the local market, which rose 1.77 percent to close at the day's high of NT$918.00.

"TSMC simply received a boost from a 1.76 percent increase in its American depositary receipts (ADRs) overnight," Tang said.

TSMC's gains contributed about 130 points to the Taiex's rise and sent the electronics and semiconductor sub-indexes higher by 1.42 percent and 1.68 percent, respectively.

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. rose 3.15 percent to end at NT$1,145.00, application specific integrated circuit (ASIC) designer AIchip Technologies Inc. gained 3.85 percent to close at NT$2,430.00, and United Microelectronics Corp., a smaller contract chipmaker, added 1.11 percent to end at NT$54.50.

The 0.94 percent rebound of U.S.-based artificial intelligence chip designer Nvidia Corp. on Thursday also led many Taiwanese AI-related stocks to move higher Friday, Tang said.

AI server maker Quanta Computer Inc. rose 3.85 percent to close at NT$256.50, rival Wistron Corp. gained 4.26 percent to end at NT$98.00, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, added 4.12 percent to close at NT$252.50.

iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, ended up 0.86 percent at NT$176.50.

"Thanks to the gains posted by financial heavyweights, the broader market received an additional boost as CTBC Financial Holding Co. made a meaningful comeback after the recent sell-off by institutional investors," Tang said.

In the financial sector, which rose 0.93 percent, CTBC Financial moved higher by 1.86 percent to close at NT$32.90, a rebound from recent weakness resulting from foreign institutional selling after the company announced it would compete with Taishin Financial Holding Co. to take over Shin Kong Financial Holding Co.

Taishin Financial also rose 1.37 percent to end at NT$18.45, while Shin Kong Financial closed unchanged at NT$12.95. In addition, Cathay Financial Holding Co. gained 1.76 percent to end at NT$63.50.

Dealers said in line with the broader market, old economy stocks largely attracted buying throughout the session but their gains appeared capped.

Riding the spike in international crude oil prices, Formosa Plastics Corp. rose 1.78 percent to close at NT$40.05, and Formosa Petrochemical Corp. ended 1.19 percent higher at NT$50.90.

Shipping stocks appeared mixed with Evergreen Marine Corp., the large container cargo shipper, down 0.55 percent to close at NT$180.00, and rival Wan Hai Lines Ltd. down 0.76 percent to end at NT$78.20.

Yang Ming Marine Transport Corp. rose 0.98 percent at NT$62.10.

"Investors had better pay close attention to how U.S. markets react to the August nonfarm payroll data today," Tang said. "As the Taiex is still trading below the 120-day moving average and remains technically weak and vulnerable to U.S. volatility."

According to the TWSE, foreign institutional investors bought a net NT$1.20 billion worth of shares on the main board Friday.