Taiwan shares end at new high despite renewed tensions in Middle East

Taipei, May 5 (CNA) Shares in Taiwan continued to set new closing records on rotational buying Tuesday despite new concerns over tensions in the Middle East, with gains moderated by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) in consolidation mode, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 64.15 points, or 0.16 percent, at 40,769.29 after moving between 40,552.78 and 40,885.05. Turnover totaled NT$997.64 billion (US$31.30 billion).

"Although TSMC came under pressure today, rotational buying remained active as investors picked up other tech heavyweights, paving the path to another closing high," Taishin Securities Investment Advisory analyst Tony Huang said.

After hitting a fresh closing high on Monday, TSMC, which accounts for over 40 percent of total market value, fell 1.10 percent to NT$2,250.00. TSMC's retreat contributed about 200 points to the Taiex's losses.

"Like markets in Seoul and Tokyo, AI optimism continued to drive the Taipei market higher as investors shrugged off renewed tensions in the Middle East. Investors appeared to think that particular geopolitical unease is controllable," Huang said.

On Monday, the United States and Iran traded fire in the Strait of Hormuz, pushing up crude oil prices.

"With American major cloud service providers proposing massive capital expenditures, investors continued to buy AI-related tech stocks," Huang said.

Shares in smartphone IC designer MediaTek Inc., which has devoted itself to developing application-specific integrated circuits for AI use, soared 10 percent, the maximum daily increase, to end at NT$3,155.00, and Nanya Technology Corp. surged 8.23 percent to close at NT$256.50 due to a global memory chip shortage.

In addition, AI server maker and iPhone assembler Hon Hai Precision Industry Co. gained 5.27 percent to end at NT$279.50.

The nontech sector largely closed mixed, while petrochemical stocks attracted strong interest on a spike in crude oil prices, Huang said.

Among them, Formosa Petrochemical Corp. rose 2.59 percent to close at NT$55.40 and Formosa Chemicals & Fibre Corp. ended up 1.97 percent at NT$51.80. Nan Ya Plastics Corp., the parent of Nanya Technology, jumped 6.33 percent to close at NT$94.00, and Taita Chemical Co. rose 1.56 percent at NT$19.50.

Bucking the upturn, Fortune Electric Co. fell 2.40 percent to close at NT$895.00, and Shihlin Electric & Engineering Corp. lost 1.74 percent to end at NT$198.00.

Also lifted by rotational buying, the financial index rose 1.18 percent. Fubon Financial Holding Co. gained 1.32 percent to close at NT$92.20, and Cathay Financial Holding Co. added 1.31 percent to end at NT$77.20.

"I do not rule out any major technical pullback on the Taiex after a recent significant rally. However, the index could see strong support ahead of 40,000 points," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$3.94 billion of shares on the main board Tuesday.