Taiwan shares extend gains after U.S. tech rally

Taipei, Jan. 7 (CNA) Shares in Taiwan extended their momentum from a session earlier to close above the 23,600 point level Tuesday, with the bellwether electronics sector continuing to drive the broader market higher after a rally by tech stocks in the United States overnight, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 103.56 points, or 0.44 percent, at 23,651.27, after coming off a high of 23,943.95. Turnover totaled NT$424.67 billion (US$12.99 billion).

The index soared 2.79 percent on Monday.

"Investors continued to chase TSMC (Taiwan Semiconductor Manufacturing Co.) amid optimism over artificial intelligence development by taking advantage of the gains posted by U.S.-listed tech stocks overnight," Moore Securities Investment Consulting analyst Adam Lin said, referring to a 1.24 percent increase on the tech-heavy Nasdaq index.

Contract chipmaker TSMC, the most heavily weighted stock on the local market, rose 0.44 percent to close at NT$1,130.00, but came off a high of NT$1,160.00. Gains by TSMC contributed about 40 points to the Taiex's rise.

"Investors are upbeat about TSMC's December sales report (due Friday) and also hope the company will provide positive leads at its Jan. 16 investor conference," Lin said. "Despite profit taking during the session, the stock is likely to move higher in the future."

Buying spread to other semiconductor stocks with smartphone IC designer MediaTek Inc. up 4.56 percent to end at NT$1,490.00, and IC packaging and testing services provider ASE Technology Holding Co. up 5.42 percent to close at NT$175.00.

However, United Microelectronics Corp., a smaller contract chipmaker, lost 2.42 percent to end at NT$42.35 amid escalating competition from Chinese rivals.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co., which also rolls out AI servers, gained 2.98 percent to close at NT$190.00, and rival Quanta Computer Inc. ended up 0.51 percent at NT$295.50.

"Non-tech stocks largely moved in weakness and also capped the gains on the broader market," Lin said.

The petrochemical industry reversed Monday's 3.15 percent increase to fall 1.03 percent Tuesday, with Formosa Plastics Corp. down 4.69 percent to close at NT$34.55, and Formosa Chemicals & Fibre Corp. down 4.46 percent to end at NT$26.80, amid concerns over a global supply glut.

Elsewhere in the old economy sector, King's Town Construction Co. lost 2.25 percent to close at NT$65.10, and Kindom Development Co. dropped 1.18 percent to end at NT$50.10, with the construction industry falling 1.16 percent.

In the financial sector, which lost 0.14 percent, CTBC Financial Holding Co. shed 0.51 percent to close at NT$39.20, and Mega Financial Holding Co. lost 0.64 percent to end at NT$38.55, while Cathay Financial Holding Co. rose 0.44 percent to close at NT$69.10.

"The gains in recent sessions have made the local main board technically healthier, but U.S. markets are worthy watching as they are expected to dictate the Taiex," Lin said.

According to the TWSE, foreign institutional investors bought a net NT$11.13 billion worth of shares on the main board Tuesday.