Taiwan shares rebound as TSMC returns to NT$1,000 mark

Taipei, Dec. 2 (CNA) Shares in Taiwan moved sharply higher Monday as the bellwether electronics sector led the broader market to climb out of its weakness last week following a rally among tech stocks on markets in the United States on Friday, dealers said.

Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker, made a big comeback and buying spread to other large-cap tech stocks, helping the Taiex jump over technical barriers near the 60-day moving average of 22,579 points, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark weighted index, ended up 474.43 points, or 2.13 percent, at 22,736.93 after fluctuating between 22,456.50 and 22,802.53. Turnover totaled NT$310.67 billion (US$9.52 billion).

The market opened up 0.87 percent and buying accelerated with electronics heavyweights, in particular TSMC, in focus following a 0.83 percent increase on the tech-heavy Nasdaq index and a 1.52 percent rise on the Philadelphia Semiconductor index at the end of last week, dealers said.

The market's strength continued to the end of the trading day, recovering from a fall last week of 641.82 points, or 2.80 percent, amid concerns over U.S. President-elect Donald Trump's threats to impose tariffs on goods from Canada, Mexico and China, dealers said.

"Judging from the gains posted by tech stocks on the U.S. markets Friday and electronics heavyweights on the market here today, I think fears over Trump's tariff threats were pretty much priced in, followed by a rebound," Mega International Investment Services Corp. analyst Alex Huang said.

"A fall in U.S. Treasury yields also made tech stocks more attractive."

Huang said TSMC was a major driver of the market's rebound, helping the Taiex "jump over tech barriers ahead of the 60-day moving average and move even higher by the end of the session."

After its American depositary receipts (ADRs) gained 1.92 percent on Friday, TSMC rose 3.92 percent to close at NT$1,035.00 in Taipei on Monday.

The stock's gains contributed about 310 points to the Taiex's rise and sent the electronics index and the semiconductor sub-index higher by 2.73 percent and 3.52 percent, respectively.

Interest was also seen among other major semiconductor stocks. Smartphone IC designer MediaTek Inc. closed 4.38 percent higher at NT$1,310.00, and United Microelectronics Corp., a smaller contract chipmaker, gained 2.41 percent to close at NT$44.60.

IC packaging and testing services provider ASE Technology Holding Co. finished up 1.98 percent at NT$154.50.

Also in the electronics sector, power management solution provider Delta Electronics Inc. rose 1.97 percent to close at NT$288.50, and Yageo Corp., the world's third largest multi-layer ceramic capacitor (MLCC) supplier, gained 1.17 percent to end at NT$520.00.

Buying in other large-cap tech stocks appeared limited. iPhone assembler and AI server maker Hon Hai Precision Industry Co. rose only 0.26 percent to close at NT$196.00, and Quanta Computer Inc., another AI server maker, rose 0.69 percent to end at NT$293.00.

"With the electronics sector attracting most of the attention, old economy stocks were largely marginalized throughout the session," Huang said.

Amid lingering worries over weak demand from China, Formosa Petrochemical Corp. lost 1.22 percent to close at NT$40.40, Formosa Chemicals & Fibre Corp. fell 0.44 percent to end at NT$33.70, and Formosa Plastics Corp. dropped 0.36 percent to close at NT$41.20.

Bucking the downturn, Nan Ya Plastics Corp. ended up 0.90 percent at NT$39.05.

The steel industry remained hurt by a global supply glut with Tung Ho Steel Corp. sliding 0.28 percent to close at NT$70.30, and Ta Chen Stainless Pipe Co. falling 1.01 percent to end at NT$34.35.

Staying resilient, China Steel Corp., the largest steel maker in Taiwan, closed unchanged at NT$21.20.

With Israel and Hezbollah trading accusations of ceasefire violations over the weekend, shipping stocks outperformed other old economy stocks.

The turmoil led international shippers to sail longer routes to avoid risks in the Middle East, which is expected to push up freight rates, Huang said.

Among the shippers expected to benefit, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rise 1.84 percent to close at NT$221.00, and rival Yang Ming Marine Transport Corp. ended up 1.50 percent to end at NT$74.30.

Huang said the financial sector benefited from its improving bottom line, up 1.54 percent, with Cathay Financial Holding Co. up 2.89 percent to close at NT$67.60, and Fubon Financial Holding Co. up 1.82 percent to end at NT$89.60.

"It is just the beginning of December and listed companies are set to report their October sales reports in 10 days, which could affect individual stocks," Huang said.

"Investors should watch for when the Taiex returns to its 20-day moving average (22,894 points) and turn significantly healthier technically."

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$15.02 billion in shares on the market Monday.