Taiwan shares end up but fall short of 42,000 points

Taipei, May 12 (CNA) Shares in Taiwan closed higher Tuesday after hitting the 42,000-point mark briefly, with the bellwether electronics sector the major driver of the gains following a U.S. tech rally overnight, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 108.26 points, or 0.26 percent, at 41,898.32 after moving between 41,471.57 and 42,253.42. Turnover totaled NT$1.38 trillion (US$43.39 billion).

It was the fourth consecutive session that the index breached the 42,000-point mark but failed to sustain all the earlier gains and end below that level.

"Judging from the movement, I think the Taiex needs some time to consolidate before standing well above 42,000 points," Hua Nan Securities analyst Kevin Su said.

"The silver lining was that with U.S. tech stocks moving higher amid AI optimism, no major pullback was possible on the local main board with the nearest technical support around 41,672 points, the five-day moving average."

The Philadelphia Semiconductor Index soared 2.59 percent overnight, leading Taiwan's counterparts to gain, Su said.

"The bright spot was that Taiwan Semiconductor Manufacturing Co. (TSMC) rebounded from yesterday's slump, indicating the impact from reports that Apple could shift orders to Intel was short-lived," Su said. "On Intel's compromised yield rates, TSMC is expected to continue to dominate the global high-end chip market."

TSMC, the world's largest contract chipmaker, which accounts for over 40 percent of total market value, rose 0.89 percent to close at NT$2,255.00, contributing about 160 points to the Taiex's rise.

United Microelectronics Corp., a smaller contract chipmaker, surged 10 percent, the maximum daily increase, to end at NT$104.50, and IC packaging and testing services firm ASE Technology Holding Co. rose 3.35 percent to close at NT$555.00. However, smartphone IC designer MediaTek Inc. ended down 4.64 percent at NT$3,700.00.

Flat panel maker Innolux Corp. jumped 10 percent to close at NT$35.50 on improving profitability in the first quarter and buying spread to rival AUO Corp., which also surged 10 percent to NT$20.70.

"The electronics sector attracted about 80 percent of today's turnover so that many nontech stocks languished," Su said.

Formosa Plastics Corp. fell 3.25 percent to close at NT$47.65 and Nan Ya Plastics Corp. shed 2.62 percent to end at NT$89.10. Allis Electric Co. shed 2.37 percent to close at NT$123.50, and Fortune Electric Co. ended down 0.76 percent at NT$914.00.

In the financial sector, which lost 2.06 percent, Cathay Financial Holding Co. fell 2.55 percent to close at NT$76.40 and Fubon Financial Holding Co. dropped 1.88 percent to end at NT$93.70.

"Investors should keep a close eye on the ongoing earnings season at home and abroad for clues about future index movement," Su said, citing Nvidia Corp.'s investor conference slated for May 20 U.S. time.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$30.49 billion of shares on the main board Tuesday.