Taiwan shares end up after U.S. rally on eased inflation

Taipei, July 15 (CNA) Shares in Taiwan bounced back Wednesday from a slump a session earlier, with buying sparked by a rally in the United States overnight after slower-than-expected June inflation, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 893.64 points, or 2.00 percent, at 45,631.59 after moving between 44,850.69 and 45,881.91. Turnover totaled NT$984.08 billion (US$30.61 billion), down from an average of NT$1.06 trillion in the previous five sessions.

"Market sentiment improved as U.S. inflation eased in June, so local tech stocks simply followed their American counterparts to move higher," Hua Nan Securities analyst Kevin Su said.

The Philadelphia Semiconductor Index rose 2.54 percent and the tech-heavy Nasdaq index added 0.90 percent Tuesday after the June CPI grew 3.5 percent year-on-year, slower than the expected 3.8 percent.

"Investors stayed upbeat about AI development as major cloud service providers continued to invest in AI infrastructure," Su added.

The electronics sector rose 1.98 percent with IC packaging and testing service firm ASE Technology Holding Co. rising 6.55 percent to close at NT$683.00 and smartphone IC designer MediaTek Inc. growing 2.19 percent to end at NT$3,740.00.

On a spike in product prices, memory chip supplier Winbond Electronics Corp. soared 10 percent, the maximum daily increase, to close at NT$180.500 and rival Nanya Technology Corp. jumped 7.37 percent to end at NT$481.00.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of total market value, gained only 0.83 percent to close at NT$2,440.00. Its consolidation capped the Taiex's upturn and limited turnover.

"Many investors stayed on the sidelines, waiting for TSMC's second quarter results and third quarter guidance (due Thursday)," Su said.

Also in the electronics sector, shares in iPhone assembler Hon Hai Precision Industry Co. rose 1.49 percent to end at NT$239.00. On rising product prices, printed circuit board maker Compeq Manufacturing Co. surged 10 percent to close at NT$218.00, and Yageo Corp., the world's third-largest multi-layer ceramic capacitor supplier, gained 2.57 percent to end at NT$798.00.

Nontech stocks also attracted buying in line with the broader market. "Petrochemical stocks continued to move higher led by the four major entities of the conglomerate Formosa Plastics Corp.," Su said.

Due to improving profitability, Nan Ya Plastics Corp. soared 8.33 percent to close at NT$227.50, and Formosa Plastics Corp. ended up 3.30 percent at NT$65.70. Formosa Petrochemical Corp. soared 10 percent to close at NT$72.80, and Formosa Chemicals & Fibre Corp. ended up 5.67 percent at NT$70.80.

COVID-19 and flu Test kit provider Panion & BF Biotech Inc. rose 1.97 percent to close at NT$62.00 and ScinoPharm Taiwan, Ltd. added 4.77 percent to end at NT$20.85.

"The U.S. June producer price index (due later Wednesday) is worth watching for more clues about inflation," Su said.

According to the Taiwan Stock Exchange, foreign institutional investors sold a net NT$1.42 billion of shares on the main board Wednesday.