Taiwan shares bounce back as electronics sector regains footing

Taipei, Jan. 14 (CNA) Shares in Taiwan staged a technical rebound, rising about 300 points Tuesday, following a slump the previous session, as the bellwether electronics sector led the gains ahead of an investor conference by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 309.19 points, or 1.37 percent, at the day's high of 22,797.52, off a low of 22,542.93. Turnover totaled NT$273.21 billion (US$8.26 billion).

The market opened 0.39 percent, bouncing back from a 2.28 percent plunge Monday, and momentum continued as TSMC saw buying accelerate, in particular in the late trading session, helping the Taiex return to the 120-day moving average of 22,565 points at the end of the session, dealers said.

TSMC, the most heavily weighted stock on the local market, rose 1.40 percent to close at the day's high of NT$1,090.00. The stock gains contributed about 120 points to the Taiex's rise and boosted the electronics index by 1.33 percent.

"Buying in TSMC reflected optimism toward its upcoming investor conference (set for Thursday) as investors widely anticipate the chipmaker to provide positive leads," Mega International Investment Services Corp. analyst Alex Huang said.

TSMC's buying spread to other semiconductor stocks with United Microelectronics Corp., a smaller contract chipmaker, up 3.30 percent to end at NT$31.95, TSMC's application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. up 2.12 percent to close at NT$1,205.00, and TSMC's IC assembly equipment provider Scientech Corp. rising 1.83 percent to end at NT$361.50.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co. rose 1.75 percent to close at NT$174.50.

Also in the tech sector, artificial intelligence maker Wistron Corp. rose 1.46 percent to end at NT$104.50, while Quanta Computer Inc., another AI server supplier, fell 0.55 percent to close at NT$269.00, and PC brand Asustek Computer Inc. dropped 0.16 percent to end at NT$608.00.

In addition to tech stocks, "the old economy sector also steamed ahead, with many petrochemical stocks climbing out of recent weakness," Huang said. "Their valuations are low."

In the petrochemical industry, which gained 2.54 percent after crude oil prices rose to a four-month high overnight, shares in Formosa Plastics Corp. soared 8.04 percent to close at NT$34.95, Formosa Chemicals & Fibre Corp. surged 6.65 percent to end at NT$27.25, Nan Ya Plastics Corp. jumped 6.10 percent to close at NT$30.45, and Formosa Petrochemical Corp. ended up 2.70 percent at NT$36.10.

In the crude price related textile industry, which rose 1.12 percent, Far Eastern New Century Corp. increased 1.49 percent to close at NT$30.60, and Eclat Textile Co. added 0.97 percent to end at NT$519.00.

With the financial sector up 1.23 percent, Cathay Financial Holding Co. rose 2.02 percent to close at NT$65.50, and Fubon Financial Holding Co. gained 1.11 percent to end at NT$90.80.

"In addition to TSMC's investor conference, investors should also pay close attention to when tech stocks on the U.S. markets will leave the current volatility behind," Huang said.

"Unless the Taiex returns to 23,000 points it will not become technically healthy," he added.

Despite the gains on the Taiex, foreign institutional investors sold a net NT$12.995 billion worth of shares on the main board Tuesday.