Taiwan shares end up on thin turnover ahead of U.S. election

Taipei, Nov. 5 (CNA) Shares in Taiwan moved moderately higher Tuesday with turnover staying thin as many investors preferred to stay on the sidelines as voting got underway in the U.S. presidential election, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 141.40 points, or 0.62 percent, at 23,106.79 after fluctuating between 22,849.83 and 23,178.80. Turnover totaled NT$328.48 billion (US$10.27 billion).

The market opened down 0.41 percent and moved further lower to the day's low in the early morning session, down about 115 points, as selling was sparked by a 0.61 percent decline on the Dow Jones Industrial Average and a 0.33 percent decline on the tech-heavy Nasdaq index overnight as the U.S. markets largely drifted aimlessly before the vote opens, dealers said.

But the Taiex regained its footing in the mid-morning session as buying interest focused on select large-cap electronics stocks, particularly in contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), as well as old-economy stocks in the shipping and electric machinery sectors.

This buying momentum pushed the broader market back into positive territory, lifting it above the 20-day moving average of 23,072 points by the end of the session, dealers added.

"Judging from today's rebound, I suspect some investors wanted to push up the index over the nearest technical resistance ahead of the 20-day moving average to keep the market technically healthy," Concord Securities analyst Kerry Huang said.

"I do not rule out the possibility that government-led funds stood behind the gains in a bid to bolster market confidence amid political uncertainties as TSMC was one of the major stocks to receive a boost," Huang said.

"Buying TSMC was the most effective way to support the broader market at a time of low turnover."

TSMC, the most heavily weighted stock in the local market, rose 0.96 percent to close at NT$1,050.00, after coming off a low of NT$1,030.00.

TSMC's gains contributed about 80 points to the Taiex's rise and sent the electronics index and semiconductor sub-index higher by 0.65 percent and 0.67 percent, respectively.

"It seemed to me that these government-led funds wanted to prevent TSMC from falling below NT$1,047, the 20-day moving average, to maintain its technical strength," Huang said.

Other major semiconductors moved in weakness with IC packaging and testing services provider ASE Technology Holding Co. down 1.64 percent to end at NT$150.00, and smartphone IC designer MediaTek Inc. down 0.39 percent to close at NT$1,290.00.

However, Alchip Technologies Inc., an application-specific integrated circuit (ASIC) designer, extended momentum from a 7.39 percent hike on Monday as MediaTek announced to buy a stake through a private placement.

As U.S.-based artificial intelligence (AI) chip designer Nvidia Corp. outperformed the U.S. markets, up 0.48 percent overnight, Taiwan's AI server maker Quanta Computer Inc. rose 1.44 percent to close at NT$318.00, and rival Inventec Inc. soared 9.25 percent to end at NT$50.20.

Falling back from Monday's upturn, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, closed unchanged at NT$214.00 and its affiliate Foxconn Technology Co. dropped 2.19 percent to end at NT$85.00.

"Large-cap stocks in the old economy sector also got a boost after recent consolidation," Huang said. "Today, shipping stocks rode the waves of hopes that freight rates will continue to grow."

In the transportation industry, which rose 2.31 percent, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, gained 3.33 percent to close at NT$217.50, and rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd. grew 3.82 percent and 5.46 percent, respectively, to end at NT$70.70 and NT$94.70.

Airline stocks appeared mixed with China Airlines down 0.22 percent to close at NT$23.50, but EVA Airways up 0.26 percent to end at NT$37.90.

In the electric machinery industry, which rose 2.14 percent, Fortune Electric Co. soared 6.96 percent to close at NT$599.00 as the company reported a 57.34 percent year-on-year increase in consolidated sales in the first nine months of this year. In addition, Shihlin Electric & Engineering Corp. gained 2.42 percent to end at NT$211.50.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. rose 1.69 percent to close at NT$90.20, while Wei Chuan Foods Corp. ended down 0.56 percent at NT$17.90.

In the financial sector, which increased 0.15 percent during Tuesday's trading, Cathy Financial Holding Co. rose 0.29 percent to close at NT$69.80, while Fubon Financial Holding Co. ended unchanged at NT$92.30.

"Despite the uncertainties from the political side, investors at home and abroad have embraced high hopes the U.S. Federal Reserve will cut interest rates later this week as the markets have anticipated a rate cut will push up liquidity, a positive sign to market movement," Huang said, referring to the two-day policymaking meeting scheduled by the Fed to start Wednesday.

According to the TWSE, foreign institutional investors bought a net NT$9.31 billion worth of shares on the main board Tuesday.