Taiwan shares rebound but turnover shrinks ahead of U.S. election

Taipei, Oct. 25 (CNA) Shares in Taiwan staged a technical rebound, rising more than 150 points Friday after a slump a session earlier, with the bellwether electronics sector leading the gains in the wake of gains posted by the tech heavy Nasdaq index in the United States overnight, dealers said.

However, turnover was reduced as many investors stayed on the sidelines reluctant to chase prices amid uncertainties created by the upcoming U.S. presidential election slated for Nov. 5, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 155.93 points, or 0.67 percent, at 23,348.45 after moving between 23,222.77 and 23,388.53. Turnover totaled NT$300.47 billion (US$9.37 billion). On Thursday, the local main board fell 142.24 points, or 0.61 percent, at 23,192.5 on turnover of NT$376.62 billion.

The market opened up 0.22 percent and momentum accelerated with buying sparked by a 0.76 percent hike on the Nasdaq index Thursday, with large-cap electronics stocks, such as iPhone assembler Hon Hai Precision Industry Co. and smartphone IC designer MediaTek Inc., in focus, dealers said.

The strength continued until the end of the session with the Taiex jumping over the nearest technical hurdles ahead of the 10-day moving average of around 23,277 points, ending a three losing session streak, dealers added.

"Today's gains were largely led by big electronics stocks after a tech rally on U.S. markets overnight," Concord Securities analyst Kerry Huang said. "However, turnover fell despite the growing Taiex as many investors preferred to stay idle and do nothing for the moment as the U.S. presidential vote is now too close to call."

According to Huang, Friday's turnover was below the average of about NT$353 billion for the previous five trading sessions.

"While TSMC (Taiwan Semiconductor Manufacturing Co.) moved slightly higher, other large-cap tech stocks attracted rotational buying and served as a driver to the Taiex throughout the session," Huang said, referring to stocks such as Hon Hai and MediaTek, which played catch-up with TSMC.

TSMC, the most heavily weighted stock on the local main board, rose 0.47 percent to close at NT$1,065.00 after fluctuating between NT$1,060.00 and NT$1,070.00. TSMC's gains contributed about 40 points to the Taiex's rise.

With the electronics index up 0.80 percent, Hon Hai, second to TSMC in terms of market value, gained 2.13 percent to end at NT$216.00, and MediaTek, No. 3 in market capitalization, rose 3.54 percent to close at NT$1,315.00.

In addition, IC packaging and testing services provider ASE Technology Holding Co. rose 1.89 percent to close at NT$162.00, and power management solution supplier Delta Electronics Inc. added 2.16 percent to end at NT$402.00.

Meanwhile, artificial intelligence server maker Quanta Computer Inc. rose 1.64 percent to close at NT$310.00, and rival Wistron Corp. gained 5.02 percent to end at NT$115.00. In addition, flat panel supplier AUO Corp. rose 1.47 percent to close at NT$17.30, and rival Innolux Corp. gained 1.23 percent to end at NT$16.40.

Stocks outside the electronics sector largely moved higher in line with the rebound on the broader market, Huang said.

"The auto and auto parts sector followed Tesla to post gains today as the U.S. electric vehicle brand soared after its third quarter results beat the market's earlier expectations," Huang added.

With Tesla shares soaring almost 22 percent overnight, the local auto index rose 1.16 percent Friday with auto parts supplier Turvo International Co. up 5.97 percent to close at NT$168.50 and counterpart Hota Industrial Manufacturing Co. up 1.22 percent to end at NT$58.00. In addition, China Motor Corp. rose 1.49 percent to close at NT$68.20, and Hotai Motor Co., a Toyota agent in Taiwan, added 1.69 percent to end at NT$661.00.

Elsewhere in the old economy sector, Formosa Plastics Corp. rose 1.41 percent to close at NT$46.85, and China Petrochemical Development Co. added 1.36 percent to end at NT$8.20. Meanwhile, textile brand Far Eastern New Century Corp. rose 2.30 percent to close at NT$37.85, and Formosa Taffeta Co. ended up 1.29 percent at NT$19.65.

In the financial sector, which rose 0.42 percent, Cathay Financial Holding Co. rose 1.17 percent to close at NT$69.00, and Fubon Financial Holding Co. gained 0.99 percent to end at NT$92.20.

"Although the Taiex breached the 10-day moving average today, the main board still remains in consolidation mode as sentiment remains haunted by the U.S. election vote," Huang said. "The index could move up or down 300-500 points around 23,500 points in the short term," Huang added.

In addition to the U.S. election, local investors should keep a close eye on portfolio adjustments of the many exchange-traded funds in November and December, which could move individual stocks.

According to the TWSE, foreign institutional investors bought a net NT$17.92 billion worth of shares on the main board Friday.