Taiwan shares soar over 600 points after U.S. rally

Taipei, Feb. 9 (CNA) Shares in Taiwan closed more than 600 points higher Monday, as a strong rally in the United States late last week prompted investors to buy large-cap electronics stocks, dealers said.

The Taiex, the Taiwan Stock Exchange's (TWSE) benchmark weighted index, ended up 621.70 points, or 1.96 percent, at 32,404.62 after moving between 31,956.21 and 32,666.06.

However, turnover totaled NT$630.88 billion (US$19.96 billion), down from the average of NT$714.41 billion in the previous five trading sessions.

"The Taiex followed U.S. markets and stayed well above the 32,000-point mark today," Hua Nan Securities analyst Kevin Su said, referring to a 2.47 percent rise in the Dow Jones Industrial Average and a 2.18 percent gain on the tech-heavy Nasdaq index.

"Enthusiasm over AI development triggered buying both at home and abroad," Su said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for more than 40 percent of total market value and produces most of the chips used in AI devices, rose 1.97 percent to close at NT$1,815.00, although it retreated from an intraday high of NT$1,835.00.

"TSMC failed to hold onto all of its earlier gains as investors turned cautious ahead of the Lunar New Year holiday, amid concerns over possible negative developments overseas," Su said. "Today's reduced turnover also reflected that sentiment."

Among other AI-related stocks, smartphone IC designer MediaTek Inc. rose 7.02 percent to close at NT$1,830.00, while memory chip supplier Winbond Electronics Corp. surged 10 percent, the daily maximum, to end at NT$107.50.

AI-related buying also pushed Nan Ya Printed Circuit Board Corp. up 10 percent to NT$416.50 and lifted co-packaged optics device supplier LandMark Optoelectronics Corp. by 9.50 percent to NT$1,095.00.

Su said old-economy stocks were largely overshadowed by the technology sector, although some industries tied to AI development attracted interest, citing the petrochemical sector, which rose 1.99 percent.

Nan Ya Plastics Corp. rose 6.12 percent to close at NT$78.00 on optimism surrounding its production of fiber cloth used in printed circuit boards, while Formosa Plastics Corp. added 1.97 percent to close at NT$46.65.

In the financial sector, which gained 1.10 percent on improving fundamentals, Cathay Financial Holding Co. rose 1.98 percent to NT$77.20, while Fubon Financial Holding Co. gained 1.52 percent to end at NT$93.80.

Su advised investors to keep at least 30 percent of their portfolios in cash, waiting for buying opportunities after the Lunar New Year holiday.

According to the TWSE, foreign institutional investors bought a net NT$24.77 billion worth of shares on the main board Monday.