Taiwan shares end sharply up as TSMC closes at day's high

Taipei, July 1 (CNA) Shares in Taiwan closed sharply higher Wednesday, extending gains from the previous session, as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) finished at the day's high after its American depositary receipts (ADRs) posted strong gains overnight, dealers said.

Following a 2.50 point increase Tuesday, the Taiex, the Taiwan Stock Exchange's benchmark index, ended up 893.08 points, or 1.94 percent, at 47,018.99 after moving between 46,234.70 and 47,293.10. Turnover totaled NT$1.302 trillion (US$40.85 billion).

"The Taiex was driven higher by the tech sector as buying focused on TSMC after U.S. chip stocks posted strong gains amid AI optimism worldwide," Cathay Futures Consultant analyst Tsai Ming-han said, referring to a 3.21 percent increase on the Philadelphia Semiconductor Index overnight.

After its ADRs rose 4.94 Tuesday, TSMC, which accounts for over 40 percent of total market value, rose 3.94 percent to close at NT$2,505.00. Its gains contributed about 760 points to the Taiex rise and sent the electronics index 2.44 percent higher.

"Judging from the buying, I think many investors were betting TSMC will give positive leads at its investor conference (slated for July 16)," Tsai said. "The stock could challenge its historical intraday high of NT$2,535 (on June 23) soon."

Buying spread to other semiconductor heavyweights with IC packaging and testing firm ASE Technology Holding Co. up 3.38 percent to end at NT$703.00 and smartphone IC designer MediaTek Inc. up 2.12 percent to close at NT$4,335.00.

However, memory chip supplier Nanya Technology Corp., lost 6.96 percent to end at NT$421.00.

Also in the tech sector, iPhone assembler and AI server maker Hon Hai Precision Industry Co. fell 1.20 percent to close at NT$248.00, while power management solution provider Delta Electronics Inc. ended up 2.05 percent at NT$1,990.00.

With the tech sector in focus on Wednesday buying, "large cap financial stocks bucked the upturn to cap the Taiex's upturn as selling escalated in the afternoon session," Tsai said.

Cathay Financial Holding Co. shed 3.36 percent to close at NT$95.00 and Fubon Financial Holding Co. lost 2.39 percent to end at NT$122.50.

Many old economy stocks largely lagged behind their electronic counterparts with Eclat Textile Co. falling 0.32 percent to close at NT$311.50, and Far Eastern New Century Corp., another textile maker, shedding 0.70 percent to end at NT$28.30, Tsai said.

Formosa Plastics Corp. dropped 0.37 percent to close at NT$54.30, but Nan Ya Plastics Corp. soared 10 percent, the maximum daily increase, to end at NT$183.00 on its efforts to produce chemical materials used in AI gadgets.

"Statistics indicate July is traditionally a good month for the Taiex. I expect the index will move higher on TSMC's gains ahead of the investor conference, but a major pullback could be seen in August or September," Tsai added.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$32.38 billion of shares on the main board Wednesday.