Taiwan shares make a comeback but turnover thin

Shares in Taiwan rebounded Monday, gaining more than 1 percent, after the U.S. Federal Bureau of Investigation (FBI) affirmed its decision not to pursue charges against Democratic Party presidential nominee Hillary Clinton, dealers said.

The FBI's statement seemed to bring relief to investors over the upcoming U.S. presidential vote because it could improve Clinton's odds of defeating Republican rival Donald Trump, a scenario global financial markets have hoped for, they said.

Turnover on the exchange remained thin as many investors took to the sidelines, waiting for the outcome of the Nov. 8 presidential vote before deciding their next move in the market, dealers said.

The weighted index on the Taiwan Stock Exchange ended up 121.69 points, or 1.34 percent, at 9,189.84, after moving between 9,102.97 and 9,191.67, on turnover of NT$55.21 billion (US$1.75 billion).

The market opened up 0.37 percent in reaction to the FBI's decision on Clinton's e-mail controversy, and momentum accelerated as investors, buoyed by the U.S. futures market trending higher, bet on a rebound on Wall Street later in the day, dealers said.

Buying in other regional markets, such as Tokyo, Hong Kong and Seoul, also put investors in Taiwan in a buying mode, in particular in the bellwether electronics sector, to push up the weighted index to near the day's high at the close, they said.

"The FBI's decision not to pursue a charge against Clinton could pave the path for a victory for the Democratic Party's presidential candidate," KGI Securities analyst Phil Chu said.

"Market sentiment here seemed to improve somewhat, and bargain hunters were willing to jump into the market to pick up market heavyweights that had been hard hit in recent sessions amid worries over Clinton's e-mail controversy."

Last week, the weighted index closed down 238.77 points or 2.57 percent to close at 9,068.15 on Friday after foreign institutional investors sold a net NT$19.10 billion worth of shares.

On Monday, the electronics sector closed up 1.54 percent and the semiconductor sub-index ended up 1.87 percent after contract chip maker Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local equity market, rose 2.44 percent to close at the day's high of NT$189.00.

Also in the high-tech sector, Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, gained 1.83 percent to end at NT$83.50, and Largan Precision Co. (???), a smartphone camera lens supplier to Apple Inc., added 2.00 percent to close at NT$3,565.00.

Among the gaining old economy stocks, Formosa Petrochemical Corp. (???) rose 6.47 percent to end at NT$107.00, and Eclat Textile Co. (??) gained 7.15 percent to close at NT$352.00.

"Despite the significant gains in index points, today's turnover was thin, indicating that many investors preferred to stay out away from the trading floor until the U.S. election results come out," Chu said.

"While the local market expects Wall Street to bounce back tonight, local shares could take a breather tomorrow, a day before the U.S. election, with strong technical resistance ahead of the 20-day moving average of around 9,250 points," Chu said.

Though the exchange's weighted index rose on Monday, foreign institutional investors remained on the sell side, selling a net NT$3.79 billion in shares, according to the TWSE.

Source: Focus Taiwan News Channel