Taiwan shares close above 10,900 points

Taipei, Shares in Taiwan rose and ended above the 10,900- point mark Monday as investors were encouraged by a higher Wall Street at the end of last week to pick up local equities, dealers said.

The bellwether electronics sector served as a driver to the upturn as select electronic component makers steamed ahead, while gains posted by large-cap stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC), appeared limited throughout the session, the dealers said.

Despite the gains in the weighted index, turnover failed to expand significantly as many investors remained on the sidelines amid lingering concerns over trade friction between the United States and China, the dealers said.

The weighted index on the Taiwan Stock Exchange closed up 92.86 points, or 0.86 percent, at 10,902.21, after moving between 10,847.17 and 10,916.69, on turnover of NT$105.14 billion (US$3.42 billion).

The market opened up 0.35 percent in reflection of the gains posted on the U.S. market, where the S&P 500 index and the tech-savvy Nasdaq index closed at an all-time high Friday, the dealers said.

Interest in the local main board increased after 11 a.m. and momentum accelerated, as investors were motivated by a higher China equity market, with tech stocks in focus, to push the Taiex up to breach the 11,000-point level by the end of the session, they said.

"It seems that a higher Wall Street was encouraging investors here as bargain hunters emerged to take advantage of recent consolidation on the main board," Ta Ching Securities analyst Jerry Chen said.

"More importantly, the currencies in the region are stabilizing against the U.S. dollar, which has reduced worries over further fund outflows from the region," Chen said, referring to a rebounding China equity markets bolstered by a higher Chinese yuan against the greenback.

The U.S. dollar index, which tracks the currencies of Washington's six major trading partners, moved lower after U.S. Federal Reserve Chair Jerome Powell said in a speech in the annual central bank meeting Friday that the Fed will raise interest rates in a "gradual" manner.

"To many investors, the tone of Powell sounded a little bit dovish, so a weakening greenback simply prompted equity investors in the region to buy as fears over depleting liquidity were fading," Chen said.

He said that throughout the session, firms rolling out passive components such as chip resistors and multi-layer ceramic capacitors staged a technical rebound from a recent slump.

Among them, Walsin Technology Co. gained 10 percent, the maximum daily increase, to close at NT$308.50, Yageo Corp. rose 8.09 percent to end at NT$695.00, and Holy Stone Enterprise Co. added 6.91 percent to close at NT$178.00.

In the optoelectronics industry, Largan Precision Co., a smartphone camera lens supplier to Apple Inc., rose 2.44 percent to close at NT$4.615.00, and rival Asia Optical Co. gained 2.29 percent to end at NT$80.40.

Among non-tech stocks which generally moved higher, Formosa Plastics Corp. rose 0.89 percent to close at NT$113.00, Formosa Chemicals & Fibre Corp. added 1.65 percent to end at NT$123.50, while Cathay Financial Holding Co. closed unchanged at NT$52.80.

While its shares rose, TSMC's gains appeared smaller than the broader market, rising 0.62 percent to end at NT$245.00 with only 15.12 million shares changing hands. Dealers said that due to low trading volume registered by large-cap stocks like TSMC, turnover on the broader market remained thin.

"The limited turnover on the main board today showed that sentiment remained cautious as many investors preferred to stay on the sidelines for the moment, watching closely how the trade dispute between Washington and Beijing will develop," Chen said.

"Unless more investors are willing to trade to boost turnover to NT$130 billion or higher, it will not be easy for the Taiex to jump over the strong technical hurdles ahead of 11,000 points," he said.

According to the TWSE, foreign institutional investors bought a net NT$9.29 billion-worth of shares on the main board Monday.

Source: Focus Taiwan News Channel