Taiwan shares breach 10,800 points on higher Wall Street

Taipei-Shares in Taiwan extended their momentum to close higher Wednesday, passing 10,800 points, as investors took their cue from a higher Wall Street overnight to raise holdings, dealers said.

Semiconductor stocks in the bellwether electronics sector moved sharply higher, led by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), pushing up the broader market throughout the session, they said.

Buying spread to old economy and financial stocks which offset a slump suffered by select suppliers to Apple Inc. amid lingering concerns over shipments of the premium iPhone X, they added.

The weighted index on the Taiwan Stock Exchange closed up 90.84 points, or 0.85 percent, at 10,801.57, after moving between 10,759.61 and 10,813.16, on turnover of NT$139.727 billion (US$4.72 billion).

The market opened up 0.46 percent in the wake of the gains on Wall Street, where the S&P 500 index and the tech-heavy NASDAQ index both hit new highs on Tuesday, the first trading day of 2018, dealers said.

Buying focused on the semiconductor sector, led by the Philadelphia Semiconductor Index on the U.S. market which gained 2.77 percent overnight, to lift TSMC and many other integrated circuit stocks which served to drive the upturn, they said.

"Judging from the strong showing made by TSMC and other large cap stocks, I think foreign institutional investors continue to stay on the buy side as they are eager to rebuild their positions after returning from the New Year holiday," Concord Securities analyst Kerry Huang said.

According to the TWSE, foreign institutional investors bought a net NT$3.83 billion worth of shares on the main board on Wednesday after net buying of NT$8.65 billion a day earlier.

TSMC, the most heavily weighted stock in the local market, gained 1.94 percent to close at NT$237.00 with 29.28 million shares changing hands. Led by TSMC, the electronics sector ended up 1.09 percent and the semiconductor sub-index closed up 1.95 percent.

TSMC's strong momentum started on Tuesday, the first trading session of the year, and continued into Wednesday after local media reported the company received rush orders of 100,000 chips for high performance computing device use from China.

In the IC sector, TSMC's smaller rival United Microelectronics Corp. rose 1.05 percent to close at NT$14.40 and IC designer MediaTek Inc. gained 3.09 percent to end at NT$300.50.

Bucking the upturn on the broader market, shares in Largan Precision Co., a smartphone camera lens supplier to Apple, fell 2.59 percent to close at NT$4,145.00 after hitting a high of NT$4,345.00, and iPhone assembler Hon Hai Precision Industry Co. lost 1.05 percent to end at NT$94.00, off an early high of NT$95.30.

"Investors remain worried about sales of the iPhone X. It is possible that such worries will continue to weigh on these Apple suppliers until the U.S. firm releases its shipments for the October-December period," Huang said. Apple has scheduled an investor conference for Feb. 2.

Huang said buying also rotated to the non-high tech sector to push the weighted index even higher at the end of the session.

Among gaining old economy stocks, shares in Nan Ya Plastics Corp. rose 1.56 percent to close at NT$78.20, and Formosa Petrochemical Corp. added 2.17 percent to end at NT$117.50 on a spike in international crude oil prices overnight.

"I expect Wall Street will keep dictating the local equity market," Huang said. "Even if an uptrend continues, the local main board is likely to face stiff technical resistance ahead of 10,882 points, an intraday high seen on Nov. 22."

Source: Focus Taiwan News Channel