Taiwan shares surge on optimism over U.S.-China trade talks

Taipei, June 10 (CNA) Taiwan shares closed sharply higher Tuesday, climbing 451.85 points amid optimism over ongoing trade talks between the United States and China, dealers said.

The bellwether electronics sector led the rally, boosted by an overnight surge in U.S. tech stocks, with contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) a major driver of the gains, dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 2.07 percent at 22,242.14, after moving between 21,921.24 and 22,294.86. Turnover totaled NT$383.2 billion (US$12.79 billion).

"Today's strength surprised me," said Tom Tang, an analyst at MasterLink Securities. "Investors seem upbeat about U.S.-China trade talks, as signs suggest the Trump administration may be softening its stance."

Kevin Hassett, head of the White House's National Economic Council, was quoted by CNBC saying on Monday that the Trump administration has expected" after the handshake" in London, "any export controls from the U.S. will be eased and the rare earths will be released in volume" by China.

"Turnover expanded as investors rushed to buy large-cap semiconductor stocks, especially TSMC, following gains in the U.S. tech sector," Tang added, noting a 1.96 percent rise in the Philadelphia Semiconductor Index overnight.

TSMC, the most heavily weighted stock on the local market, rose 3.98 percent to NT$1,045.00, pushing the electronics index and semiconductor subindex up 2.88 percent and 3.68 percent, respectively.

TSMC's rally contributed roughly 320 points to the Taiex's rise, as other semiconductor stocks also performed well. Memory chip supplier Nanya Technology Corp. gained 5.03 percent to NT$54.30, smartphone IC designer MediaTek Inc. rose 3.89 percent to NT$1,335.00, and IC packaging and testing services provider ASE Technology Holding Co. added 1.79 percent to NT$142.50.

Tang noted that optimism surrounding artificial intelligence (AI) development drove further interest in AI-related stocks. AI server supplier Quanta Computer Inc. rose 2.72 percent to NT$283.50, while LITE-ON Technology Corp., which manufactures power solutions for AI servers, added 1.42 percent to the same closing price.

In addition, iPhone assembler and AI server maker Hon Hai Precision Industry Co. gained 0.65 percent to NT$155.50, and AI PC brand Asustek Computer Inc. advanced 2.01 percent to NT$659.00.

Outside of tech, dividend-yielding stocks also drew interest. Evergreen Marine Corp., Taiwan's largest container shipper, rose 1.07 percent to NT$236.50, while EVA Airways gained 1.37 percent to close at NT$40.75.

The financial sector underperformed the broader market, falling 0.34 percent. Cathay Financial Holding Co. dropped 2.51 percent to NT$66.00, while CTBC Financial Holding Co. rose 1.19 percent to NT$42.50.

"Technically, the Taiex looks healthier and could continue to rise, though it may face strong resistance near the 23,000-point mark," Tang said.

According to the TWSE, foreign institutional investors bought a net NT$39.83 billion in shares on the main board on Tuesday.