Taiwan shares end up as TSMC rebounds from early losses

Taipei, Sept. 24 (CNA) Shares in Taiwan closed more than 140 points higher Tuesday as Taiwan Semiconductor Manufacturing Co. (TSMC) recouped its earlier losses in the late trading session, helping the broader market return to positive territory by the end of the session, dealers said.

Other heavyweights in the old economy sector, in particular in the transportation industry also moved higher, adding momentum to the local main board and vaulting the index past stiff technical resistance ahead of the 60-day moving average, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 146.25 points, or 0.66 percent, at the day's high of 22,431.78 after coming off a low of 22,154.55. Turnover totaled NT$344.84 billion (US$10.78 billion)

The market opened down 11.74 points and moved to the day's low, of 130.98 points in the mid-morning session as investors pocketed gains built on Monday, when the Taiex rose 0.57 percent, dealers said.

However, buying took hold in particular in the afternoon session, with large cap stocks in focus, such as chipmaker TSMC, the most heavily weighted stock on the local market, leading the broader market to recover from its earlier weakness and pass the 60-day moving average of 22,315 points by the end of the session, dealers added.

"As the U.S. Federal Reserve started a rate cut cycle last week, liquidity on the global market has been on the rise, which the equity markets favor," Mega International Investment Services Corp. analyst Alex Huang said.

The Fed cut its key interest rates by 50 basis points and hinted an additional half percentage point reduction will follow later in the year.

"After the initial downturn on the Taiex, investors picked up bargains with TSMC serving as one of the drivers pushing the main board above the 60-day moving average, which has made the local market technically healthier," Huang said.

TSMC rose 1.02 percent to close at the day's high of NT$987.00 after hitting a low of NT$971.00. TSMC's gains contributed about 80 points to the Taiex's rise and sent the electronics index and the semiconductor sub-index higher by 0.82 percent and 1.00 percent, respectively.

Among other large cap semiconductor stocks which benefited from late session buying, smartphone IC designer MediaTek Inc. rose 4.37 percent to end at the day's high of NT$1,195.00, while IC packaging and testing services provider ASE Technology Holding Co. ended unchanged at NT$157.00 but came off a low of NT$152.00.

In addition, Global Unichip Corp., TSMC's application specific integrated circuit (ASIC) design subsidiary, rose 1.91 percent to end at the day's high of NT$1,065.00.

Also in the tech sector, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, gained 1.67 percent to close at NT$183.00, and power management solutions provider Delta Electronics Inc. added 1.66 percent to end at NT$397.00.

"With ample liquidity across the board, bargain hunters not only eyed tech heavyweights but also old economy counterparts today," Huang said.

After rising 1.51 percent on Monday, the transportation index rose 3.64 percent on Tuesday as expectations of a strike threatened by port workers on the U.S. east coast continued to attract buying in shipping stocks.

Container cargo shipper Wan Hai Lines Ltd. soared 10 percent, the maximum daily increase, to close at NT$90.70. Evergreen Marine Corp., the largest container cargo shipper in Taiwan, and rival Yang Ming Marine Transport Corp. also rose 4.62 percent and 4.81 percent, respectively, to end at NT$204.00 and NT$67.60.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. rose 1.82 percent to close at NT$89.50, and textile maker Far Eastern New Century Corp. added 1.09 percent to end at NT$37.10.

Despite the upturn, the electric machinery industry fell 0.72 percent as investors locked in their gains from a session earlier with Chung-Hsin Electric & Machinery Manufacturing Corp. down 1.14 percent to close at NT$173.00, and Fortune Electric Co. down 2.31 percent to end at NT$635.00.

In the financial sector, which rose 0.32 percent, Cathay Financial Holding Co. rose 1.38 percent to close at NT$66.30, and Fubon Financial Holding Co. gained 0.76 percent to end at NT$92.60.

"After today's gains, TSMC is likely to challenge the critical NT$1,000 mark on the back of its strong fundamentals so that the technically healthier Taiex could move to test 23,500 points in the near future amid ample liquidity," Huang said.

Investors should keep alert over upcoming U.S. economic data which could move American markets, referring to reports including the August Personal Consumption Expenditures Price Index (PCE) due on Friday and the September nonfarm data due next week, Huang added.

According to the TWSE, foreign institutional investors bought a net NT$10.55 billion worth of shares on the local main board Tuesday.