Taiwan shares end at new high for 2nd straight session

Taipei, May 14 (CNA) Shares in Taiwan closed at a record high and moved closer to the 21,000 point mark Tuesday for the second consecutive session as the bellwether electronics sector continued to steam ahead, dealers said.

Turnover failed to expand, indicating caution remains over when the U.S. Federal Reserve will cut interest rates ahead of the release of the April consumer price index on Wednesday (U.S. time), dealers added.

The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 128.14 points, or 0.61 percent, at 20,985.85 after moving between 20,816.77 and 20,994.53. Turnover totaled NT$469.26 billion (US$14.48 billion).

The market opened down 21.76 points and fluctuated within a small range in the morning session, in the wake of mixed U.S. markets amid cautious sentiment toward the sticky inflation in Washington, dealers said.

Asustek Computer

However, the Taiex then saw momentum build up, in particular in the afternoon session, with large cap downstream electronics stocks in focus, led by PC brand Asustek Computer Inc. This pushed the Taiex up to close at nearly the day's high, dealers added.

"Asustek had lagged behind the market for some time and investors simply seized on its earnings report to pick up the stock, taking advantage of its relatively low valuation," Mega International Investment Services Corp. analyst Alex Huang said.

"Buying in Asustek was also seen among other downstream tech companies, giving an additional boost to the entire electronics sector as well as the broader market," Huang said.

Asustek surged 10 percent, the maximum daily increase, to close at NT$512.00 after the company said on Monday that its net profit for the first quarter soared 39 percent from a year earlier to NT$5.45 billion and expressed optimism over the artificial intelligence PC market.

Among other downstream electronic product suppliers, shares in Acer Inc., another PC brand, rose 2.41 percent to end at NT$48.90, and Quanta Computer Inc., a major contract notebook computer maker, gained 5.10 percent to close at NT$288.50.

In addition, iPhone assembler Hon Hai Precision Industry Co. added 1.47 percent to end at NT$172.00 with investors betting the company will come up with positive leads at an investor conference set to start after the market closes.

● Hon Hai Q1 net profit up 72% year-on-year but down 59% sequentially

The electronics sector rose 1.09 percent with the computer and peripherals sub-index soaring 3.07 percent.

Chip-related stocks

"In the semiconductor sector, buying in MediaTek resumed after recent consolidation, pushing up the entire sector, although TSMC (Taiwan Semiconductor Manufacturing Co.) moved in a narrow range after yesterday's surge," Huang said.

Smartphone IC designer MediaTek Inc. rose 3.59 percent to close at NT$1,155.00, while TSMC, the most heavily weighted stock on the local market, rose 0.73 percent to end at NT$825.00, after hitting a low of NT$816.00.

Also in the semiconductor sector, which rose 1.00 percent, application specific integrated circuit (ASIC) designer Alchip Technologies Ltd. jumped 7.54 percent to close at NT$2,710.00, and Global Unichip Corp., TSMC's ASIC design subsidiary, gained 2.62 percent to end at NT$1,370.00.

Non-tech stocks appeared mixed as market attention focused on the tech sector.

Cargo shippers

"However, the transportation industry continued to steam ahead, with large container cargo stocks in the spotlight on the back of rising freight rates," Huang said, referring to an increase in freight rates for long haul journeys to the United States and Europe from Asia, which sent the transportation index higher by 2.16 percent.

Evergreen Marine Corp., the largest container cargo shipper, rose 4.62 percent to close at NT$215.00, and rival Yang Ming Marine Transport Corp. surged 7.06 percent to end at NT$71.30, while Wan Hai Lines Ltd. fell 2.43 percent to close at NT$68.40.

Buying also spread to bulk cargo shipping stocks with Sincere Navigation Corp. up 4.26 percent to end at NT$29.40.

Construction, financial firms

Bucking the upturn, the construction index fell 2.66 percent. Among the falling construction stocks, Cathay Real Estate Development Co. lost 3.13 percent to close at NT$34.10, and Goldsun Building Materials Co. shed 2.04 percent to end at NT$45.55.

Elsewhere in the old economy sector, Formosa Plastics Corp. fell 0.44 percent to close at NT$68.40, and textile brand Far Eastern New Century Corp. ended down 1.01 percent at NT$34.25.

In the financial sector, which lost 1.10 percent to cap the upturn on the broader market, Cathay Financial Holding Co. dropped 1.45 percent to close at NT$54.30, and E. Sun Financial Holding Co. ended down 1.41 percent at NT$27.90.

"Despite the gains on the Taiex, turnover failed to expand and stayed below NT$500 billion, indicating many investors remain reluctant to chase prices before the U.S. inflation data," Huang said. "The data is critical as uncertainty over the timing of the Fed's rate cuts still bothers market sentiment."

According to the TWSE, foreign institutional investors bought a net NT$21.92 billion worth of shares on the main board Tuesday.