Taiwan shares close at record high after Fed meeting

Taipei, Sept. 18 (CNA) Taiwan shares closed at a record high Thursday after the U.S. Federal Reserve cut interest rates and signaled more reductions this year following its two-day policy meeting, dealers said.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), gained 331.11 points, or 1.30 percent, to 25,769.36 after moving between 25,475.25 and 25,769.36. Turnover totaled NT$455.31 billion (US$15.14 billion).

The Fed lowered its benchmark rate by 25 basis points overnight, with its "dot plot" showing expectations for two more cuts this year and one in 2026.

"The Fed could cut rates again in October and December, which would further boost liquidity," said Alex Huang, an analyst at Mega International Investment Services. "The Taiex simply smashed its closing record on ample liquidity."

Huang said tech stocks led the rally as lower interest rates made growth shares more attractive compared with their dividend yields.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock, rose 1.58 percent to a record NT$1,285.00, contributing 160 points to the Taiex and sending the electronics index up 1.70 percent.

Memory chipmaker Winbond Electronics Corp. surged 10 percent, the daily limit, to NT$32.30, while rival Nanya Technology Corp. jumped 9.14 percent to NT$80.00 on stronger product prices. TSMC's IC packaging equipment supplier Scientech Corp. added 4.48 percent to end at NT$373.50.

Also in the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co., second to TSMC in terms of market value, rose 1.42 percent to close at NT$215.00, and power management solution provider Delta Electronics Inc. gained 6.70 percent to end at NT$892.00.

In contrast, non-tech shares were mixed. "Military concept stocks" weakened as expectations of higher defense spending had already been priced in, Huang said. Lungteh Shipbuilding Co. lost 6.01 percent to NT$156.00, while aircraft maintenance provider Air Asia Co. shed 3.07 percent to NT$56.90.

Among old-economy stocks, Nan Ya Plastics Corp. fell 2.12 percent to NT$36.90, while Formosa Plastics Corp. edged down 0.13 percent to NT$37.35.

In the financial sector, which gained 0.21 percent, Cathay Financial Holding Co. slipped 1.07 percent to NT$65.00, while E. Sun Financial Holding Co. rose 0.60 percent to NT$33.35.

"After repeated record highs, many valuations look stretched," Huang warned. "The market's upside could be limited, and investors should be alert to a possible pullback."

According to the TWSE, foreign institutional investors bought a net NT$12.15 billion worth of shares on the main board Thursday.