Taiwan shares end sharply higher as TSMC steams further ahead

Taipei, Dec. 3 (CNA) Shares in Taiwan extended momentum from a session earlier, moving higher by almost 300 points to close above the 23,000 point mark Tuesday on the back of a higher electronics sector, with buying sparked by a rally among tech stocks on U.S. markets overnight, dealers said.

The bellwether electronics sector was led by contract chipmaker Taiwan Semiconductor Manufacturing Co.(TSMC), which was pushed up by more than 5 percent in its American depositary receipts (ADRs) on Monday, while strong interest in the financial sector provided another boost to the broader market, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 290.53 points, or 1.28 percent, at 23,027.46 after fluctuating between 22,972.30 and 23,144.78. Turnover totaled NT$392.21 billion (US$12.02 billion). On Monday, the main board rose 474.43 points, or 2.13 percent, also led by the electronics sector.

The market opened up 1.04 percent with large-cap tech stocks, in particular TSMC, in focus in a knee-jerk reaction to a 2.61 percent surge on the Philadelphia Semiconductor index overnight, dealers said.

The strength of the broader market continued until the end of the session as buying in financial heavyweights accelerated in the late trading session, offseting some profit taking which capped the upturn of TSMC, dealers added. The strong showing helped the Taiex jump over technical barriers ahead of 22,842 points, the 20-day moving average.

"The Philadelphia Semiconductor Index played catch up with other major indexes on U.S. markets overnight, giving a strong indication to TSMC to go higher further, driving the main board higher today," Hua Nan Securities analyst Kevin Su said.

After its ADRs surged 5.27 percent, TSMC, the most heavily weighted stock on the local market, rose 1.93 percent to close at NT$1,055.00 after coming off a high of NT$1,065.00. TSMC's gains contributed about 160 points to the Taiex's rise and pushed the electronics index and semiconductor sub-index higher by 1.25 percent and 1.63 percent, respectively.

"Optimism toward artificial intelligence development continued to send TSMC shares higher further as they continue to serve as the major AI chip supplier in the world," Su said.

"Moreover, as Intel Corp. announced overnight the retirement of its CEO Pat Gelsinger, many investors have embraced high hopes that with his departure, the U.S. chipmaker will change its business strategies by outsourcing TSMC chip production," Su said.

Buying was also seen among other semiconductor stocks with dynamic random access memory (DRAM) chip supplier Nanya Technology Corp. rising 2.77 percent to end at NT$33.80, United Microelectronics Corp., a smaller contract chipmaker, gaining 0.45 percent to close at NT$44.80, and smartphone IC designer MediaTek Inc. growing 0.38 percent to end at NT$1,315.00.

Second to TSMC in market value, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, rose 0.26 percent to close at NT$196.50.

"Hon Hai underperformed TSMC and the broader market as many investors remain worried about (Donald) Trump's threats to impose tariffs on goods from Mexico as the Taiwanese manufacturer has a sprawling production base there," Su said.

Last week U.S. president-elect Trump said he will slap a 25 percent tariff on goods from Canada and Mexico and raise tariffs on merchandise from China by 10 percent on the first day of his administration in January.

Other smaller AI-related stocks moved much higher on their relatively low valuations, Su said. Among them, cloud-enabled services subsidiary Wiwynn Corp. rose 3.32 percent to close at NT$2,020.00 and AI graphics card vendor Giga-Byte Technology Co. added 1.65 percent to end at NT$278.00.

"The financial sector lent additional support to the Taiex as investors expect financial firms to be generous and give large cash dividends next year as many of them have enjoyed a better bottom line this year," Su said.

With the financial index rising 1.52 percent, Cathay Financial Holding Co. rose 1.92 percent to close at NT$68.90, and Fubon Financial Holding Co. gained 1.45 percent to end at NT$90.90. In addition, Mega Financial Holding Co. grew 1.90 percent to close at NT$40.20, and E. Sun Financial Holding Co. ended up 1.65 percent at NT$27.80.

In the old economy sector, petrochemical stocks bounced back from Monday's weakness with Formosa Plastics Corp. up 1.46 percent to close at NT$41.80, and Formosa Chemicals & Fibre Corp. up 2.82 percent to end at NT$34.65.

In addition, tensions in the Middle East continue to send shipping stocks higher with the transportation index up 2.81 percent. Evergreen Marine Corp., the largest container cargo shipper in Taiwan, rose 3.62 percent to close at NT$229.00, and Wan Hai Lines Ltd. gained 3.24 percent to end at NT$86.10.

Among airline stocks, China Airlines soared 6.36 percent to close at NT$26.75 and EVA Airways gained 2.53 percent to end at NT$44.60 on hopes that peak season effects in the fourth quarter will boost demand for air cargo transportation.

"After the 20-day moving average, the Taiex is expected to face the next technical resistance ahead of 23,713 points, an intraday high on Oct. 18," Su said.

According to the TWSE, foreign institutional investors bought a net NT$28.32 billion worth of shares on the main board Tuesday.