Taiex surges 1,200+ points to record high as Fed fears ease

Taipei, Oct. 5 (CNA) Shares in Taiwan surged more than 1,200 points Monday to a record high as buying in AI-related stocks was boosted by a U.S. tech rally Friday amid easing concerns over a Federal Reserve rate hike following weaker-than-expected U.S. jobs data for August, dealers said.

The Taiex, the Taiwan Stock Exchange's benchmark index, ended up 1,236.30 points, or 2.55 percent, at 49,712.04 after moving between 48,574.95 and 49,770.66. Turnover totaled NT$1.15 trillion (US$36.11 billion).

The index opened higher and continued to gain momentum through the close, with the electronics index rising 3.00 percent after the tech-heavy Nasdaq gained 1.19 percent Friday, dealers said.

"The poor August nonfarm payroll report prompted investors to see a lower chance of a Fed rate hike in October," Moore Securities Investment Consulting analyst Adam Lin said.

The U.S. job report showed that only 29,000 jobs were created in August, well below the expected 90,000, sending the probability of a Fed rate increase down to 22.7 percent from 64.2 percent a week earlier, Lin said.

"That was positive for interest rate-sensitive tech stocks, so many investors who previously stood on the sidelines returned to the market Monday to buy AI-related stocks and boost turnover amid the AI boom," Lin said.

After its American depositary receipts gained 2.96 percent Friday, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which accounts for over 40 percent of the market's total value, rose 3.00 percent to close at a record NT$2,575.00.

The stock contributed about 600 points to the Taiex's rise.

Among other semiconductor heavyweights, smartphone IC designer MediaTek Inc. gained 4.34 percent to end at NT$5,165.00, while IC packaging and testing firm ASE Technology Holding Co. closed up 4.07 percent at NT$742.00.

Elsewhere in the tech sector, copper-clad laminate supplier Elite Material Co. surged 10 percent, the maximum daily increase, to close at NT$5,700.00.

Power management solutions provider Delta Electronics Inc. jumped 8.86 percent to end at NT$2,005.00, while iPhone assembler and AI server maker Hon Hai Precision Industry Co. closed up 1.20 percent at NT$254.00.

While most nontech stocks were largely subdued, the petrochemical index rose 4.30 percent, led by Nan Ya Plastics Corp., which surged 10 percent to close at NT$286.00 amid the development of raw materials for use in tech products.

Elsewhere, Evergreen Marine Corp., Taiwan's largest container shipping company, lost 2.29 percent to close at NT$234.50, while rival Wan Hai Lines Ltd. ended down 2.21 percent at NT$110.50.

In the financial sector, Fubon Financial Holding Co. rose 1.00 percent to close at NT$152.00, while Cathay Financial Holding Co. ended unchanged at NT$111.50.

"The Taiex is only a small step away from 50,000 points," Lin said. "If U.S. gains continue, I expect the local index to hit the target as soon as tomorrow."

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$71.897 billion worth of shares on the main board Monday.