Taiwan shares end higher, but gains capped below 42,000 points

Taipei, May 14 (CNA) Shares in Taiwan closed higher Thursday with the electronics sector in focus after a U.S. overnight rebound, but gains were capped by technical resistance ahead of the 42,000-point mark, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 377.25 points, or 0.91 percent, at 41,751.75 after moving between 41,496.23 and 42,205.62. Turnover totaled NT$1.217 trillion (US$38.56 billion).

The local main board followed a U.S. rally overnight, led by large-cap AI-related electronics stocks, Mega International Investment Services analyst Alex Huang said, referring to a 1.20 percent increase on the Nasdaq index and a 2.57 percent rise on the Philadelphia Semiconductor Index.

"The Taiex repeatedly challenged the 42,000-point mark in the past few sessions but failed to sustain its earlier strength," Huang said. "After recent significant gains, it was time for the index to consolidate, paving a path to another takeoff."

Before Thursday, the Taiex had soared over 30 percent since tech stocks started staging a rebound in April.

After its American depositary receipts rose 0.63 percent overnight, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of total market value, rose 2.25 percent to close at NT$2,270.00, sending the electronics index up 1.21 percent.

United Microelectronics Corp., a smaller contract chipmaker, soared 10 percent, the maximum daily increase, to end at NT$108.00 after a foreign brokerage issued a target price of NT$132.00 for the stock.

Memory chip supplier Nanya Technology Corp. rose 6.23 percent to close at NT$341.00, but smartphone IC designer MediaTek Inc. fell 2.58 percent to end at NT$3,405.00.

Yageo Corp., the world's third largest multi-layer ceramic capacitor maker, played catch-up with its peers, surging 10 percent to close at NT$462.00, while iPhone assembler and AI server maker Hon Hai Precision Industry Co. ended down 2.59 percent at NT$245.50.

In the old economy sector, which continued to underperform the broader market, China Steel Corp., Taiwan's largest steel maker, lost 0.54 percent to close at NT$18.30, and China Steel Structure Co. ended down 0.35 percent at NT$42.50.

Shares in Asia Cement Corp. dropped 0.28 percent to close at NT$35.20, and rival TCC Group Holdings Co. fell 0.61 percent to end at NT$24.55. Machinery maker Hiwin Technologies Corp. bucked the downturn on robotics development, rising 2.74 percent, closing at NT$374.50.

With the financial index down 0.38 percent, Cathay Financial Holding Co. lost 0.78 percent to close at NT$76.70, and Fubon Financial Holding Co. ended down 0.11 percent at NT$96.40.

"Although the AI frenzy continues to dominate the market, investors had better remain alert over rising inflationary pressure, which is likely to trigger a pullback among high-flying share prices," Huang said, citing the April U.S. producer price index, which jumped 6 percent from a year earlier, the largest increase since 2022.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$4.54 billion of shares on the main board Thursday.