Taiwan shares stage strong rebound, led by tech, financial stocks

Taipei, June 9 (CNA) Shares in Taiwan staged a strong technical rebound Tuesday led by the electronics sector after a U.S. tech rally overnight, while buying also rotated to financial stocks, giving an additional boost to the broader market, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 1,201.66 points, or 2.76 percent, at 44,704.44 after moving between 43,687.62 and 44,821.71. Turnover totaled NT$1.15 trillion (US$36.16 billion).

"With the U.S. markets bouncing back overnight, market sentiment improved today, prompting investors to buy on the dip after the Taiex recorded heavy losses yesterday," Mega International Investment Services analyst Alex Huang said.

"Investors appeared to regain confidence after an initial shock from U.S. job data, which fueled fears over a rate hike by the Federal Reserve, helping the Taiex recoup almost all the losses it suffered Monday," Huang said. On Monday, the Taiex suffered the third steepest point decline of 1,568.16 points.

After the Philadelphia Semiconductor Index rose 5.61 percent on Monday, boosting the local electronics index by 2.59 percent, smartphone IC designer MediaTek Inc. soared 10 percent, the maximum daily increase, to close at NT$4,475.00, and IC packaging and testing firm ASE Technology Holding Co. gained 5.37 percent to end at NT$567.00.

However, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of total market value, rose only 0.44 percent to close at NT$2,305.00.

"TSMC is in consolidation," Huang said. "Fortunately, rotational buying continued so other chip heavyweights benefited during the current AI boom."

In addition, Largan Precision Industry Co., a smartphone lens supplier to Apple Inc., surged 10 percent to close at NT$3,885.00 amid optimism over its move into the co-packaged optics (CPO) business to tap AI growth.

"The financial sector served as another driver to today's gains on hopes that new accounting rules will boost earnings and allow financial firms to pay larger cash dividends," Huang said.

With the financial index up 6.3 percent, Cathay Financial Holding Co. jumped 9.47 percent to close at NT$104.00, and Fubon Financial Holding Co. rose 7.76 percent to end at NT$125.00. CTBC Financial Holding Co. gained 5.81 percent to close at NT$59.20, and E. Sun Financial Holding Co. ended up 3.95 percent at NT$34.20.

Old economy stocks largely traded in line with the Taiex with Fortune Electric Co. up 3.44 percent to close at NT$843.00, and Teco Electric & Machinery Co. up 2.09 percent to end at NT$73.10. Meanwhile, Eclat Textile Co. gained 3.26 percent to close at NT$348.50, and rival Far Eastern New Century Corp. ended up 3.55 percent at NT$27.70.

"Judging from today's limited turnover, I think many investors turned cautious about stiff technical resistance ahead of 45,000 points," Huang said.

"More important, investors should keep a close eye on the U.S. inflation data due Wednesday," he added.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$91.73 billion of shares on the main board Tuesday.