Taiwan shares end higher after Wall Street gains

Shares in Taiwan closed higher Thursday to push the weighted index past the 9,200-point mark as investors here were encouraged by a rally on Wall Street overnight to play catch-up on the local equity market, dealers said.

The bellwether electronics sector remained a driver that boosted the broader market, led by market heavyweights such as contract chip maker Taiwan Semiconductor Manufacturing Co. (???), while financial stocks also posted gains on bargain hunting, leading the index to move higher at the close, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE) closed up 76.38 points, or 0.83 percent, at 9,270.90, after moving between 9,238.49 and 9,303.13, on turnover of NT$87.88 billion (US$2.81 billion).

The market opened up 0.51 percent in a knee-jerk reaction to a higher Wall Street, where the Dow Jones Industrial Average closed up 0.61 percent and the S&P 500 index ended 0.53 percent higher on a strong rebound in international crude oil prices, the dealers said.

Buying focused on high-tech and financial stocks throughout the session, lifting the weighted index to breach 9,300 points at one point before profit-taking set in to cap the upturn by the close, they said, although the local main board still ended above the 9,200-point level.

"Today's buying showed that investors wanted to play catch-up with Wall Street, which posted gains in the previous sessions, when the local equity market was closed due to the typhoon (Megi)," Mega International Investment Services Corp. analyst Alex Huang said.

"After a two-day break, bargain hunters here rushed to pick up stocks, in particular in the high-tech sector, encouraged by a rally staged by TSMC's American depositary receipts (ADRs) on Wall Street over the two days," Huang said.

TSMC's ADRs closed at about NT$190.67 on Wall Street overnight, representing a more-than 4 percent premium over the stock's closing price in Taipei Monday. The local equity market was closed Tuesday and Wednesday.

On Thursday, TSMC, the most heavily weighted stock in the local market, gained 1.37 percent to close at NT$185.50, with 54.24 million shares changing hands. Led by TSMC, the electronics sector ended up 0.94 percent and the semiconductor sub-index closed up 0.98 percent.

Among other high-tech stocks, Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., added 2.12 percent to end at NT$3,845.00, and Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, which assembles iPhones and iPads, gained 1.14 percent to close at NT$79.80, while integrated circuit designer MediaTek Inc. (???) ended unchanged at NT$243.00.

Buying also spread to the non-high-tech sector, including financial stocks, the dealers said. The financial sub-index closed up 0.96 percent on the back of its relatively low valuation, they added.

In the financial sector, Fubon Financial Holding Co. (???) rose 2.86 percent to end at NT$46.80, and Cathay Financial Holding Co. (???) closed up 0.87 percent at NT$40.70.

"Looking at the gains posted by these large-cap stocks, I suspect that foreign institutional investors were behind the upturn today," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$13.34 billion-worth of shares on the main board Thursday.

Despite the latest uptrend, "I still have concerns about the stiff technical resistance at around 9,300 points. That resistance was why the weighted index failed to stand above that level at the close today," Huang said.

Source: Focus Taiwan News Channel