Taiwan shares soar led by TSMC, after U.S. tech rally

Taipei, Nov. 22 (CNA) Shares in Taiwan moved sharply higher, jumping more than 300 points Friday with buying sparked after a rally staged by tech stocks in the United States overnight, dealers said.

Amid lingering optimism toward artificial intelligence development, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) continued to serve as an anchor for the latest upturn, while gains were capped ahead of technical resistance at around 22,984 points, the 20-day moving average, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 348.66 points, or 1.55 percent, at 22,904.32 after moving between 22,799.53 and 23,019.04. Turnover totaled NT$343.74 billion (US$10.56 billion).

The market opened up 1.08 percent with large cap semiconductor stocks, in particular TSMC, in focus in the wake of a 1.61 percent increase on the Philadelphia Semiconductor Index in the United States overnight.

The strength continued before profit taking suffered by the chipmaker forced the Taiex to give up some of its earlier gains, so although the index failed to sustain all of its earlier strength it still closed above the 20-day moving average, dealers said.

"U.S. markets, again dictated the Taiex today," Da-Hwa International analyst Chang Chieh-cheng said. "As U.S. semiconductor stocks gained significantly overnight, it was no surprise that TSMC steamed ahead to lead the broader market sharply higher."

After its American depositary receipts (ADRs) rose 1.58 percent on Thursday, TSMC, the most heavily weighted stock on the local market, rose 2.97 percent to close at NT$1,040.00 after coming off a high of NT$1,050.00 in the late trading session.

TSMC's gains contributed about 240 points to the Taiex's rise and sent the electronics index and semiconductor sub-index higher by 2.11 percent and 2.66 percent, respectively.

"Investors appeared upbeat about AI development, although shares in U.S.-based AI chip designer Nvidia seesawed after its strong third quarter results. Nvidia's more than 90 percent increase in third quarter sales demonstrated strong global demand," Chang said.

TSMC serves as one of the most important suppliers to Nvidia.

TSMC's buying spread to other semiconductor stocks with smartphone IC designer MediaTek Inc. up 3.56 percent to end at the day's high of NT$1,310.00 and IC packaging and testing services provider ASE Technology Holding Co. up 1.95 percent to close at NT$156.50.

Bucking the upturn, memory chip supplier Nanya Technology Corp. shed 2.18 percent to end at NT$35.85.

In addition, Alchip Technologies Ltd., an application-specific integrated circuit (ASIC) designer rose 2.39 percent to close at NT$2,355.00, while Global Unichip Corp., TSMC's ASIC design subsidiary, ended down 1.58 percent at NT$1,245.00.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, rose only 0.25 percent to close at NT$203.00, underperforming the broader market. Quanta Computer Inc., another AI server maker, rose 1.02 percent to end at NT$297.00.

"Hon Hai will ship a relatively small amount of BG200 AI servers (powered by Nvidia's Blackwell CPU), in the fourth quarter but the volume will start to increase notably from the first quarter of next year, which could push up its share price."

At a time when the tech sector dominated the Taiex, Chang said, old economy and financial stocks appeared mixed.

"Today's buying rotated out of the shipping industry and moved to other old economy stocks. The electric machinery industry was spotlighted," Chang said.

With the electric machinery index up 1.51 percent, Shihlin Electric & Engineering Corp. rose 1.76 percent to close at NT$202.00, and Chung-Hsin Electric & Machinery Manufacturing Corp. added 1.57 percent to end at NT$161.50.

On the other hand, the transportation index fell 0.61 percent with Evergreen Marine Corp., the largest container cargo shipper in Taiwan down 1.26 percent to close at NT$236.00, and rival Yang Ming Marine Transport Corp. down 2.27 percent to end at NT$77.50.

The textile industry also received a boost from rotational buying, rising 0.87 percent as Far Eastern New Century Corp. rose 1.06 percent to close at NT$38.20, and Makalot Industrial Co. added 0.79 percent to end at NT$317.00.

In the financial sector, which fell 0.01 percent, Cathay Financial Holding Co. rose 0.30 percent to close at NT$66.80, while Fubon Financial Holding Co. ended unchanged at NT$89.30.

"There is stiff technical resistance ahead of the 20-day moving average," Chang said. "Unless turnover expands, it will not be easy for the Taiex to jump over the hurdles."

"Investors should also pay close attention to the performance of the U.S. markets to map out investment strategies," he said.

According to the TWSE, foreign institutional investors bought a net NT$8.31 billion worth of shares on the main board Friday.