Taipei--Shares in Taiwan closed above the 9,500-point mark Monday in a liquidity-driven session on the back of continued fund inflows into the country and a solid showing on Wall Street over the weekend, dealers said.
Financial and old economy stocks, which have large property assets, in particular, attracted strong buying throughout the session, while interest in select high-tech stocks, especially suppliers to Apple Inc., pushed up the broader market even further at the close, the dealers said.
The weighted index on the Taiwan Stock Exchange ended up 82.45 points, or 0.87 percent, at 9,538.01, after moving between 9,467.67 and 9,548.68, on turnover of NT$99.52 billion (US$3.22 billion).
The market opened up 0.13 percent in a knee-jerk reaction to a higher Wall Street, where the Dow Jones Industrial Average closed up 0.94 percent to breach 20,000 points on better-than-expected job data for January and a move by U.S. President Donald Trump to sign an executive order aimed at easing restrictions on the financial sector, they said.
Momentum on the local main board accelerated as investors were encouraged by further fund inflows into Taiwan to boost the weighted index even higher to pass 9,500 points, and the strength continued for the rest of the session, lifting the index to a 20-month high, the dealers said.
"Judging from a stronger Taiwan dollar, funds continued to enter the local market," Mega International Investment Services Corp. analyst Alex Huang said. The Taiwan dollar, which made a strong showing soon after the local exchange market opened, closed up NT$0.107 or 0.34 percent to close at NT$30.943 against the U.S. dollar.
"But I do not think the fund inflows were made by European or U.S. institutional investors, who tended to buy into local high-tech stocks," Huang said. "Today's buying largely benefited non-high- tech stocks, in particular in the financial sector, which are traditionally favored by Taiwanese investors operating overseas."
In the financial sector, which closed up 1.81 percent, Yuanta Financial Holding Co. (???) gained 4.08 percent to end at NT$12.75, Cathay Financial Holding Co. (???) rose 3.32 percent to close at NT$48.20, and Fubon Financial Holding Co. (???) added 2.23 percent to end at NT$50.50.
Huang said that buying also focused on old economy stocks, which boast large property assets, providing further evidence to support the assumption that buyers were Taiwanese investors moving their money back to Taiwan.
In the construction sector, which gained 4.29 percent at the close, Kuo Yang Construction Co. (??) rose 10 percent, the maximum daily increase, to close at NT$13.60, Kindom Construction Co. (??) also jumped 10 percent to end at NT$22.45, and Highwealth Construction Corp. (???) rose 4.60 percent to close at NT$48.85.
Huang said that buying spread to certain electronics stocks but the bellwether electronics sector still underperformed the broader market, up only 0.56 percent at the close.
Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker and an assembler of iPhones and iPads for Apple, gained 1.55 percent to close at NT$85.00, and Largan Precision Co. (???) rose 0.33 percent to end at NT$4,505.00 on late- session buying after hitting the day's low of NT$4,425.00. The earlier losses suffered by Largan reflected a 30 percent month-on-month decline in sales for January.
Bucking the upturn on the broader market, Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, closed unchanged at NT$184.50 amid concerns over slow season effects in the first quarter.
"It is possible that the local main board will pull back technically. As long as the index is able to sustain itself above 9,400 points, the current uptrend will remain intact," Huang said.
Source: Focus Taiwan News Channel