Shares in Taiwan extended gains to close above the 9,300-point mark on Thursday led by large-cap stocks, in particular smartphone camera lens supplier Largan Precision Co. (???), which passed NT$4,000.00 for the first time, establishing a record for the local market, dealers said.
Buying also spread to the old economy sector as petrochemical stocks were boosted by higher international crude oil prices and paper moved higher on the back of a spike in product prices, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed up 71.18 points, or 0.77 percent, at 9,358.14, after moving between 9,282.45 and 9,358.42, on turnover of NT$76.0 billion (US$2.38 billion).
The market opened down 4.40 points and hit a low for the day on a mild technical correction, but from about 9:30 a.m, buying emerged on inflows of foreign funds as the appreciation of the Taiwan dollar against the U.S. dollar accelerated, dealers said.
That momentum continued until the end of the session, pushing up the weighted index with market heavyweights in both high-tech and non-tech sectors in focus, they said.
"In line with other regional currencies, the Taiwan dollar appreciated against the U.S. dollar today as the U.S. dollar took a pause after a recent strong showing," Ta Ching Securities analyst Andy Hsu said. "A stronger Taiwan dollar attracted foreign investors to move funds into the local market, paving the path for today's solid gains."
The U.S. dollar fell NT$0.298 to close at NT$31.962 on Thursday. Dealers said that expectations of a higher U.S. dollar resulting from moves by the U.S. Federal Reserve to tighten monetary policy seemed to be fading.
"Ample liquidity drove today's upturn in the local equity market. I think foreign investors stood on the buy side as they still hold a large chunk of long position contracts in futures," Hsu said.
According to the TWSE, foreign institutional investors bought a net NT$2.86 billion worth of shares on the main board on Thursday. Hsu said that large-cap stocks in the bellwether electronics sector benefited from fund inflows, playing an important role in pushing up the broader market.
"Thanks to Largan, the high-tech sector closed up more than 0.7 percent," Hsu said. "In addition to fund inflows, the electronics sector attracted buying amid hopes that the Consumer Electronics Show (CES) will lift global buying in electronics devices." The four-day CES starts in Las Vegas on Friday.
Shares in Largan, a supplier to Apple Inc., rose 7.14 percent to close at NT$4,050.00, the highest level in the company's history, with 1.60 million shares changing hands. Largan remained the most expensive stock on the local equity market.
Also in the electronics sector, shares in contract chip maker Taiwan Semiconductor Manufacturing Co. (???), the most heavily weighted stock in the local market, added 0.27 percent to close at NT$183.50, while Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, fell 0.24 percent to end the day at NT$84.00.
In the paper sector, which rose 6.94 percent on the back of a supply shortage that boosted product prices, shares in Cheng Loong Corp. (??) rose 10 percent, the maximum daily increase, to close at NT$14.70 and YFY Inc. (???) gained 10 percent to end at NT$0.97.
"Despite the gains in share prices, turnover failed to expand significantly. If trading volume remains below NT$80 billion, it will be difficult for the weighted index to jump over the nearest technical hurdles ahead of 9,400 points," Hsu said.
Source: Focus Taiwan News Channel