Taiwan shares end higher following U.S.-Japan trade deal

Taipei, July 23 (CNA) Shares in Taiwan closed sharply higher Wednesday, as market sentiment improved following a U.S.-Japan trade deal that eased tariff concerns

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 330.75 points, or 1.44 percent, at the day's high of 23,318.67 after coming off a low of 23,063.57. Turnover totaled NT$352.22 billion (US$11.996 billion).

The market opened up 0.33 percent and gained momentum, particularly in the afternoon, as investors brushed off a mixed performance on U.S. markets Tuesday and responded to news that the United States and Japan had agreed to lower reciprocal tariffs to 15 percent from 25 percent.

Following the rally, the Taiex overcame strong technical resistance at 23,217 points, its five-day moving average.

"Judging from today's strong buying, I think many investors have become optimistic that Taiwan may soon reach a trade deal with the U.S., especially after Japan -- previously seen as confrontational -- agreed to substantially lower tariffs," said Tsai Ming-han, an analyst at Cathay Futures Consultant.

"Market sentiment suddenly improved, prompting investors to buy across the board," Tsai said.

After rising 1.29 percent, the bellwether electronics sector was a key driver of the Taiex's gains, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) rose 1.33 percent to close at NT$1,145.00 on last-minute buying, contributing about 120 points to the index's rise.

Buying also spread to other semiconductor stocks, with memory chipmaker Nanya Technology Corp. rising 6.17 percent to close at NT$43.05, and application-specific integrated circuit (ASIC) designer AIchips Technologies Inc. gaining 2.82 percent to finish at NT$3,825.00. However, smartphone IC designer MediaTek Inc. underperformed the broader market, ending unchanged at NT$1,430.00.

In addition, iPhone assembler and AI server maker Hon Hai Precision Industry Co. rose 2.47 percent to close at NT$166.00, while fellow AI server supplier Wistron Corp. gained 1.31 percent to finish at NT$116.00.

"Optimism over lower tariffs also benefited old economy industries," Tsai said. "Commodity stocks, as market laggards, got a boost today."

In the petrochemical sector, which rose 5.59 percent, Nan Ya Plastics Corp. surged 10 percent -- the maximum daily increase -- to close at NT$31.65, while Formosa Chemicals & Fibre Corp. gained 5.10 percent to finish at NT$26.80.

The steel sector also benefited from the improved sentiment, rising 3.18 percent. Leading steelmaker China Steel Corp. gained 3.90 percent to close at NT$20.00, while Tung Ho Steel Corp. rose 2.33 percent to finish at NT$66.00.

The financial sector added 0.80 percent, with Cathay Financial Holding Co. up 1.62 percent to end at NT$62.70 and Fubon Financial Holding Co. gaining 1.58 percent to end at NT$83.80.

"Investors should keep a close eye on the ongoing U.S. earnings season," Tsai said. "Google and Tesla are expected to report their results later today, which could influence tech stocks."

According to the Taiwan Stock Exchange (TWSE), foreign institutional investors bought a net NT$8.43 billion in shares on the main board Wednesday.