Taiwan shares end sharply higher on U.S. rally amid eased rate hike fears

Taipei, Aug. 10 (CNA) Shares in Taiwan rose by over 700 points Monday as buying was fueled by a U.S. rally after weaker-than-expected job data eased concerns about a Federal Reserve rate hike, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, closed up 702.85 points, or 1.59 percent, at 44,928.76 after trading between 44,540.71 and 45,219.40. Turnover totaled NT$847.37 billion (US$26.33 billion).

"Concerns over a Fed rate hike in September eased after the July nonfarm payrolls data," Concord Securities analyst Kerry Huang said, referring to data showing the U.S. economy lost 23,000 jobs in July, well below a market estimate of an increase of about 80,000.

"The U.S. markets had a strong performance Friday and Asian markets, including Taipei, simply followed," Huang said.

After the tech-heavy Nasdaq index rose 1.30 percent Friday, the local electronics index rose 1.80 percent Monday.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of the local market's total market value, rose only 0.42 percent to close at NT$2,380.00 as the stock remained in a consolidation phase.

"Fortunately, other large-cap electronics stocks attracted strong buying, giving a significant boost to the Taiex as investors rebuilt their AI positions after the recent sell-off," Huang said.

IC packaging and testing firm ASE Technology Holding Co. rose 7.69 percent to NT$630.00. Memory chip suppliers Nanya Technology Corp. and Winbond Electronics Corp. both hit the 10-percent maximum daily increase limit to close at NT$502.00 and NT$179.50, respectively.

Meanwhile, smaller contract chipmaker United Microelectronics Corp. gained 6.03 percent to end at NT$123.00.

Among other AI-related stocks, power management solutions provider Delta Electronics Inc. surged 10 percent to close at NT$1,815.00, and Yageo Corp., the world's third largest multilayer ceramic capacitor (MLCC) maker, gained 6.11 percent to end at NT$573.00.

Flat-panel maker AUO Corp. jumped 10 percent to close at NT$27.00 after reports that TSMC would acquire two of its plants for more than NT$30 billion to expand integrated circuit assembly capacity.

Nontech stocks largely moved in line with the Taiex. Fortune Electric Co. rose 2.76 percent to close at NT$671.00, and rival Rexon Industrial Corp. gained 2.63 percent to end at NT$31.20.

However, Formosa Plastics Corp. fell 0.36 percent to close at NT$55.60, and Nan Ya Plastics Corp. lost 1.60 percent to end at NT$185.00.

With the financial index up 0.6 percent, Cathay Financial Holding Co. gained 1.61 percent to close at NT$101.00, and Fubon Financial Holding Co. rose 1.18 percent to end at NT$128.50.

"The Taiex encountered strong technical resistance near the 45,000-point level. Investors should remain alert," Huang said. "They should also closely watch U.S. inflation data (due Wednesday U.S. time) for more clues about the Fed's next move."

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$51.71 billion worth of shares on the main board Monday.