Taiwan shares end above 10,800 points, led by Apple suppliers

Taipei, Shares in Taiwan moved sharply higher by more than 100 points Friday to close above the 10,800-point mark as investors were encouraged by significant gains posed by Apple Inc. shares overnight to pick up the U.S. firm's suppliers, dealers said.

The strong buying on the local main board also reflected eased fears over the trade dispute between the United States and China after Washington proposed negotiations with Beijing in a bid to solve their trade problems, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE) or Taiex ended up 140.91 points, or 1.31 percent, at 10,868.14, after moving between 10,770.47 and 10,882.04, on turnover of NT$126.36 billion (US$4.1 billion).

The market opened up 0.38 percent on the back of a higher Wall Street, where the Dow Jones Industrial average closed up 0.57 percent and the tech-savvy Nasdaq index ended up 0.75 percent, with Apple shares up 2.42 percent on a technical rebound a day earlier, the dealers said.

Momentum on the local main board continued and became more obvious, starting from the mid-morning session, as investors rushed to pick up major Apple suppliers, including contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Hon Hai Precision Industry Co., which pushed up the broader market past 10,800 points, they said. The strength continued into the end of the session.

"Thanks to the gains posted by Apple overnight, investors here bargain-hunted Taiwanese suppliers, which had fallen in recent sessions," Hua Nan Securities analyst Kevin Su said. "The buying showed that investors still have hopes about sales of the next-generation iPhones unveiled Wednesday."

Leading the Apple concept stocks, TSMC, the most heavily weighted stock in the local market, rose 2.35 percent to close at NT$261.00, with 37.88 million shares changing hands.

Among other gaining Apple suppliers, iPhone assembler Hon Hai, second to TSMC in terms of market value, added 2.50 percent to end at NT$77.90, smartphone camera supplier Largan Precision Co. soared 7.18 percent to close at NT$4,405.00 and metal casing maker Catcher Technology Co. rose 2.14 percent to end at NT$358.00.

Led by TSMC's significant gains, the bellwether electronics sector closed up 2.17 percent and the semiconductor sub-index ended up 2.24 percent.

"Today, the high-tech sector dominated the broader market's trading, and its gains helped the Taiex regain its footing to overcome the nearest technical resistance level ahead of the 240-day moving average at around 10,800 points," Su said. On Friday, the electronics sector accounted for almost 70 percent of the total turnover.

Elsewhere, Formosa Chemicals and Fibre Corp. rose 0.83 percent to close at NT$121.50, and food brand Uni-President Enterprises Corp. added 0.53 percent to end at NT$75.20, while Formosa Plastics Corp. fell 0.44 percent to close at NT$112.00.

"Market sentiment improved, as many investors were hoping that Washington and Beijing will resolve their trade dispute in the upcoming talks," Su said, referring to news that U.S. Treasury Secretary Steven Mnuchin has issued an invitation to China for a next round of talks.

However, U.S. President Donald Trump said in a twitter message Thursday that "we are under no pressure to make a deal with China, they are under pressure to make a deal with us."

Su said that due to Trump's "mercurial personality," investors should remain alert over how the issue will evolve, which is expected to affect global financial markets.

"After today's surge, the local main board has become technically healthier," Su said. "However, turnover remained moderate, and the Taiex needs higher trading volume to breach 10,900 points, where the 20 and 60 day moving averaged are."

Friday's turnover was short of the average of around NT$130 billion in the previous five sessions, Su said, adding that the ideal daily turnover should top that level to jump over high technical hurdles ahead of 10,900 points.

According to the TWSE, foreign institutional investors bought a net NT$9.34 billion-worth of shares on the main board Friday.

Source: Focus Taiwan News Channel