Taiwan shares make comeback as TSMC, petrochemical giants rebound

Taipei, July 30 (CNA) Shares in Taiwan made a comeback Wednesday, recouping all of the market's losses seen Tuesday, as investors flocked to contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Formosa Plastics Group heavyweights, dealers said.

Turnover shrank, however, as market sentiment was affected by lingering concerns over the United States' arbitrary tariff polices as Taiwan has not struck a deal with the U.S. on a tariff rate, dealers said.

After falling 211.46 points on Tuesday, the Taiex, the Taiwan Stock Exchange's weighted index, ended up 260.20 points, or 1.12 percent, Wednesday at the day's high of 23,461.72 after hitting a low of 23,264.64.

Turnover totaled NT$326.91 billion (US$11.004 billion), compared with NT$390.57 billion a day earlier.

"Today's gains were technical in nature as the recent weakness prompted bargain hunters to emerge," said Mega International Investment Services analyst Alex Huang.

"The Taiex remained in consolidation, with the nearest ceiling at around 23,500 points as the tariff issue continued to make investors nervous, capping turnover," Huang said.

TSMC staged a rally, rising 1.76 percent to close at NT$1,155.00 and helping the broader market emerge from Tuesday's doldrums. The stock contributed about 160 points to the Taiex's rise and supported the electronics index's 1.12 percent gain.

"TSMC remains one of investors' favorites," Huang said.

"While U.S. President Donald Trump has threatened to impose tariffs on semiconductors, TSMC is investing a lot in the U.S. with the first fab already starting mass production, and the market is optimistic that Trump will treat the company better."

Among other semiconductor stocks, smartphone IC designer MediaTek Inc. gained 1.47 percent to end at NT$1,380.00, while IC packaging and testing service provide ASE Technology Holding Co. lost 0.98 percent to close at NT$152.00, and United Microelectronics Corp., a smaller contract chipmaker, dropped 0.58 percent to end at NT$42.55.

"Another bright spot was that the four major entities under Formosa Plastics Group moved sharply higher on their low valuations," Huang said. "Because of their relatively heavier weighting in the old economy sector, their gains gave a boost to the Taiex."

Formosa Plastics Corp. and Formosa Petrochemical Corp. surged 10 percent, the maximum daily increase, to close at NT$42.65 and NT$43.25, respectively.

Formosa Chemicals & Fibre Corp. soared 9.46 percent to end at NT$29.50, and Nan Ya Plastics Corp. closed up 7.95 percent at NT$38.70.

Huang said buying also rotated to other raw material stocks, with China Steel Corp., the largest steel maker in Taiwan, rising 3.12 percent to close at NT$19.80, and Chung Hung Steel Corp. gaining 3.59 percent to end at NT$15.85.

In the financial sector, which gained 0.64 percent, Fubon Financial Holding Co. rose 0.73 percent to close at NT$82.60, and Cathay Financial Holding Co. added 0.33 percent to end at NT$61.50.

"The U.S. Federal Reserve will wrap up its two-day policymaking meeting later Wednesday, and investors should keep a close eye on the Fed's comments on the economy amid the tariff issues," Huang said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$14.19 billion in shares on the market Wednesday.