Taiwan shares end above 9,900 points amid eased trade fears

Taipei, Shares in Taiwan moved higher to close above the 9,900 point mark Friday amid eased fears over trade friction between the United States and China after U.S. President Donald Trump said he had a "very good conversation" with Chinese President Xi Jinping on trade issues, dealers said.

The bellwether electronics sector led the local main board to post gains, with some heavyweights in the Apple Inc. supply chain on an uptrend resulting from bargain hunting, while buying also spread to the old economy and financial sectors, pushing up the market to the day's high at the end of the session, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 61.85 points, or 0.63 percent, at the day's high of 9,906.59, off an early low of 9,817.29, on turnover NT$152.13 billion (US$4.96 billion).

The market opened up 0.27 percent on follow-through buying from the previous session, when the Taiex closed up 0.43 percent, with investors encouraged by gains posted on the U.S. markets, where the Dow Jones Industrial Average ended up 1.06 percent overnight, dealers said.

After the Taiex breached 9,900 points, some profit taking set in, putting the market in seesaw mode for most of the session, they said.

However, in the late trading session, strong buying emerged to boost large-cap stocks such as chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and Cathay Financial Holding Co, which helped the benchmark index return to that level by the end of the session, dealers said.

"Like other major regional markets, Taipei posted gains as investors were relieved to some extent after taking into account reduced concerns over Washington-Beijing trade disputes after Trump's Twitter remarks," Hua Nan Securities analyst Kevin Su said, referring to markets such as Tokyo, Hong Kong and Shanghai.

In his Twitter post, Trump said he had "a long and very good conversation" with Xi on the phone on many subjects, "with a heavy emphasis on Trade", and they are scheduled to continue the talks at the upcoming G20 meeting in Argentina later this month.

"While few can be sure whether the trade disputes can be resolved anytime soon, bargain hunters in the region simply used the latest development as a reason to pick up stocks for trading purposes," Su said.

Su said the bellwether electronics sector was highlighted in the buying with "Apple concept stocks" in focus, although the U.S. consumer electronics giant overnight released lower than expected iPhone sales for the July-September period and provided a worse than expected sales forecast for the October-December period.

Among the gaining Apple suppliers, shares in smartphone camera lens maker Largan Precision Co. soared 5.70 percent to close at NT$3,525.00, and iPhone assembler Hon Hai Precision Industry Co. rose 1.38 percent to end at NT$81.00.

However, buying in TSMC, the most heavily weighted stock on the local market was weak, leading the stock to underperform the broader market, up only 0.42 percent to close at NT$236.50 with 30.76 million shares changing hands.

"Largan and Hon Hai had lagged the broader market so bargain hunters bought into them for the moment," Su said. "But, it remains to be seen whether such buying will continue as Apple shares fell sharply in after-hours trading following the results for last week and the sales guidance for this quarter."

Apple shares shed more than 6 percent in after-hours trading late on Friday.

In the financial sector, which rose 1.29 percent on late session buying, shares in Cathay Financial Holding Co. gained 1.54 percent to close at NT$49.50 and Fubon Financial Holding Co. added 1.24 percent to end at NT$48.90.

Among gaining old economy stocks, Nan Ya Plastics Corp. rose 1.17 percent to close at NT$77.90 and textile maker Far Eastern New Century Corp. jumped 3.26 percent to end at NT$31.65.

"Judging from the upturn posted by these large cap stocks, I think foreign institutional investors stood on the buy side today," Su said. "But, I am cautious about movement in the short term as the Taiex has entered stiff technical resistance at the 20-day moving average of around 9,907 points."

According to the TWSE, foreign institutional investors bought a net NT$5.55 billion worth of shares on the main board Friday.

Source: Focus Taiwan News Channel