Taiwan shares end up as investors await U.S. election outcome

Taipei, Nov. 6 (CNA) Shares in Taiwan closed moderately higher Wednesday as investors waited for the outcome of the U.S. presidential election, with Republican candidate Donald Trump leading over his Democratic counterpart Kamala Harris, dealers said.

The bellwether electronics sector again led the broader market to move higher with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) in focus, but the initial upturn was capped amid fears that a Trump win will boost inflation, which could slow down the U.S. Federal Reserve's pace in its rate cut cycle, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 110.59 points, or 0.48 percent, at 23,127.38 after moving between 23,035.30 and 23,439.39. Turnover totaled US$397.71 billion (US$12.43 billion).

The market opened up 6.16 points and moved in a narrow range during most of the morning session before buying accelerated in the late morning session, leading large-cap tech stocks, in particular, TSMC, to push up the Taiex to the day's high by more than 330 points, dealers said.

But the main board saw its gains limited as investors pocketed their earlier gains in the afternoon sessions by taking into account the possible impact resulting from a Trump victory as they spotted a spike in the benchmark 10-year treasury yield on the U.S. market, dealers added.

"The intraday high for today indicated many investors felt eased to some extent as Trump is very likely to win the election, removing uncertainties from the market in the first place," Mega International Investment Services Corp. analyst Alex Huang said.

The Taiex, however, saw most of its gains eroded by the end of the session as concerns over inflation returned to haunt investors as Trump has said he will raise tariffs and boost fiscal spending, which is expected to push up inflationary pressure," Huang said.

Led by a 1.43 percent increase on the tech-heavy Nasdaq index on the U.S. markets overnight, the local electronics sector rose 0.93 percent, serving as a driver to the gains on the main board after TSMC, the most heavily weighted stock in the local market, added 0.95 percent to close at NT$1,060.00.

TSMC's gains contributed about 80 points to the Taiex's rise.

"Interest in TSMC largely reflected optimism toward its fundamentals in the current boom of artificial intelligence development," Huang said, referring to a 2.84 percent increase enjoyed by American AI chip designer Nvidia Corp. on the U.S. market overnight.

Other major semiconductor stocks also moved higher with smartphone IC designer MediaTek Inc. up 1.16 percent to end at NT$1,305.00, and IC packaging and testing services provider ASE Technology Holding Co. up 1.33 percent to close at NT$152.00. In addition, Alchip Technologies Inc., an application-specific integrated circuit (ASIC) designer, soared 10 percent to end at NT$2,410.00 after MediaTek agreed to acquire a stake through the IC designer's private placement.

Also amid artificial intelligence (AI) enthusiasm, AI server maker Inventec Inc. rose 3.11 percent to close at NT$52.10, and rival Quanta Computer Inc. added 0.79 percent to end at NT$320.50.

In addition, Wistron Corp., another AI server supplier, rose 0.84 percent to close at NT$119.50, and its cloud-enabled service subsidiary Wiwynn Corp. gained 3.11 percent to end at NT$1,990.00.

Bucking the upturn, iPhone assembler Hon Hai Precision Industry Co. lost 0.23 percent to close at NT$213.50, although the company reported a day earlier its highest sales ever for the month of October due to robust global demand for AI applications.

As the market focused on the tech sector, old economy industries largely came under pressure throughout the session, dealers said.

The cement index lost 1.13 percent, with cement brand TCC Group Holdings Co. down 1.54 percent to close at NT$32.05, and rival Asia Cement Corp. down 1.16 percent to end at NT$47.05.

Elsewhere in the old economy sector, textile maker Far Eastern New Century Corp. fell 2.80 percent to close at NT$36.50, and Eclat Textile Co. shed 2.03 percent to end at NT$532.00.

However, the steel industry was one of the few exceptions, rising 0.92 percent. China Steel Corp., the largest steel maker in Taiwan, rose 0.87 percent to close at NT$23.10, while Chung Hung Steel Corp. closed up 4.51 percent at NT$22.00.

In the financial sector, which lost 0.70 percent, Cathay Financial Holding Co. shed 1.00 percent to close at NT$69.10, and Fubon Financial Holding Co. ended down 0.98 percent at NT$69.10.

"With the U.S. election now over, investors will place emphasis back to the economic fundamentals," Huang said. "Keep alert over what the Fed will say about the economy and hint how it will carry out the interest rate cut cycle after wrapping up a policymaking meeting" slated to open Wednesday U.S. time.

Despite the gains in the Taiex, foreign institutional investors stood on the sell side, recording a net sell of NT$2.01 billion worth of shares on the main board Wednesday.