Taiwan shares end sharply higher as tech sector bounces back

Taipei, Nov. 19 (CNA) Shares in Taiwan moved sharply higher by about 300 points Tuesday as investors rushed to pick up select electronics stocks in the wake of a rally staged by tech stocks in the United States overnight, dealers said.

As investors left behind fears that the U.S. Federal Reserve might slow the pace of its interest rate cuts for the time being, buying on the local main board also rotated to the nontech sector, helping the index stand above the nearest technical resistance of 22,742 points, the five-day moving average, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 302.26 points, or 1.34 percent, at 22,848.80 after moving between 22,578.75 and 22,906,69. Turnover totaled NT$355.17 billion (US$10.95 billion).

The market opened up 0.30 percent and buying accelerated as large semiconductor stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), attracted strong interest in the wake of a 1.14 percent increase on the Philadelphia Semiconductor Index and a 0.60 percent rise on the tech-heavy Nasdaq index overnight, dealers said.

Interest also rotated to some old economy and financial stocks, adding momentum to the broader market to allow the local main board to climb out of the 0.86 percent weakness seen a session earlier when worries over growing inflationary pressure in the U.S. prompted investors to think the Fed will slow down its pace in a rate cut cycle, dealers added.

"Thanks to a booming tech sector in the United States, investors here appeared willing to rebuild their holdings in the bellwether electronics sector throughout the session today," Cathay Futures Consultant analyst Tsai Ming-han (蔡明翰) said.

The electronics index rose 1.51 percent with the semiconductor subindex up 1.61 percent after TSMC, the most heavily weighted stock in the local market, gained 1.46 percent to close at NT$1,040.00. TSMC's gains contributed about 120 points to the Taiex's rise.

"TSMC continued to dominate the Taiex, so with the stock breaching its five-day moving average of NT$1,034.00, the local main board followed suit to stand above its own five-day moving average, making itself technically healthier," Tsai said.

Buying was also seen among other semiconductor heavyweights with smartphone IC designer MediaTek Inc. up 3.63 percent to end at NT$1,285.00 and IC packaging and testing services provider ASE Technology Holding Co. up 1.98 percent to close at NT$154.50. In addition, Global Unichip Corp., TSMC's application-specific integrated circuit (ASIC) design subsidiary, grew 5.51 percent to end at NT$1,245.00.

"Artificial intelligence (AI) related-stocks outside the semiconductor industry rose but their gains were capped as many investors still waited for the results and guidance to be given by U.S.-based AI chip designer Nvidia Corp. (on Wednesday U.S. time)," Tsai said.

"Although they generally remain upbeat about Nvidia, they still prefer to get real numbers before jumping into the trading floor to buy AI-related stocks," he said.

After shares of Nvidia fell 1.29 percent overnight, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, rose only 0.49 percent to close at NT$203.50, and Wistron Corp., another AI server maker, gained just 0.44 percent to end at NT$114.00. Bucking the upturn, Quanta Computer Inc., Wistron's rival, lost 0.17 percent to close at NT$290.00.

"Rotational buying stayed active on the local main board to lift stocks in the nontech sector," Tsai said. "Shipping stocks got a significant boost as buying was sparked by their impressive results for the third quarter and optimism toward demand for cargo transportation."

The transportation industry gained 2.60 percent, with Evergreen Marine Corp., the largest container cargo shipper in Taiwan, which reported a roughly 180 percent year-on-year surge in net profit for the third quarter of this year, rising 5.12 percent to close at NT$236.00. Buying spread to Evergreen Marine's rivals Yang Ming Marine Transport Corp. and Wan Hai Lines Ltd., which rose 3.61 percent and 2.64 percent, respectively, to end at NT$74.70 and NT$93.30.

Buying also rotated to the construction industry, which rose 1.86 percent, with Kindom Development Co. rising 3.01 percent to close at NT$54.70, and Huang Hsiang Construction Corp. growing 3.20 percent to end at NT$70.90.

"But, I have to say the gains among construction stocks were technically in nature after their recent losses. Property developers remained haunted by the latest selective credit controls launched by the central bank (in September)," Tsai said.

Elsewhere in the old economy sector, Formosa Plastics Corp. lost 2.66 percent to close at NT$45.75, and Nan Ya Plastics Corp. fell 1.43 percent to end at NT$41.45.

In the financial sector, which rose 1.05 percent on an improving bottom line, Fubon Financial Holding Co. gained 1.78 percent to close at NT$91.40, and Cathay Financial Holding Co. ended up 1.04 percent at NT$67.70.

According to the TWSE, foreign institutional investors bought a net NT$10.65 billion worth of shares on the main board Tuesday.