Taiwan shares rebound over 500 points following U.S. rally

Taipei, Jan. 16 (CNA) Shares in Taiwan increased by more than 500 points Thursday, recovering from a slump a session earlier, following a rally in U.S. markets overnight as concerns over inflation eased, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 510.53 points, or 2.27 percent, at 23,025.10 after moving between 22,817.52 and 23,147.52. Turnover totaled NT$333.09 billion (US$10.11 billion).

After a 1.24 percent plunge Wednesday, the market opened up 1.35 percent Thursday as large-cap tech stocks steamed ahead after a rise of 1.65 percent on the Dow Jones Industrial Average and 2.45 percent on the tech-heavy Nasdaq index. This followed reports from Washington that core inflation had slowed.

Led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, which rose 3.76 percent to close at NT$1,105.00, the Taiex continued momentum into the end of the session.

TSMC's gains contributed about 320 points to the Taiex rise, boosting the electronics index by 2.27 percent.

"The U.S. inflation data eased fears that the Federal Reserve will reverse its rate cut policy this year. This sent treasury yields down sharply and made tech stocks attractive," Moore Securities Investment Consulting analyst Adam Lin said.

"That's why TSMC led the broader market to steam ahead today," Lin said. "Investors were also upbeat that the chipmaker would give positive leads in its investor conference (to open after the market close)."

TSMC reported a new high of NT$1.17 trillion in net profit in 2024, up almost 40 percent from 2023.

Among other large-cap semiconductor stocks, smartphone IC designer MediaTek Inc. gained 2.82 percent to end at NT$1,460.00. Meanwhile, IC packaging and testing services provider ASE Technology Holding Co. grew 2.17 percent to close at NT$165.00.

Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co., which also rolls out artificial intelligence servers, gained 1.46 percent to end at NT$173.50, and rival Wistron Corp. rose 2.96 percent to close at NT$104.50. However, Quanta Computer Inc., another AI server supplier, ended unchanged at NT$260.00.

"The strength of the Taiex was seen across the board with non-tech stocks also helping to boost the Taiex," Lin said.

With the electronic machinery index up 2.27 percent, Fortune Electric Co. rose 3.94 percent to close at NT$501.00 and Shihlin Electric & Engineering Corp. added 2.61 percent to end at NT$177.00.

Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. rose 1.42 percent to close at NT$78.80, while edible oil supplier Great Wall Enterprise Co. ended down 0.58 percent at NT$51.50.

In the financial sector, which rose 0.79 percent, Fubon Financial Holding Co. rose 1.33 percent to close at NT$91.60, and Cathay Financial Holding Co. gained 1.24 percent to end at NT$65.50.

"Today's gains vaulted the Taiex past the stiff technical resistance ahead of 23,000 points," Lin said. "But investors should be alert over whether the index will continue above that level and lead to a longer-term uptrend."

Foreign institutional investors bought a net NT$25.35 billion worth of shares on the main board Thursday, according to the TWSE.