Taiwan shares rebound, led by electronics sector

Taipei-Shares in Taiwan staged a technical rebound Friday as the bellwether electronics moved higher throughout the session, dealers said.

Companies that are part of Apple's supply chain, the so-called Apple concept stocks, sparked the market's upturn as investors seized on the strong fourth quarter results reported by Apple smartphone camera lens supplier Largan Precision Co., they said.

While funds flocked into the electronics sector, non-high-tech stocks were mixed, with the petrochemical sector pulling back from recent gains that were driven by higher international crude oil prices, they said.

The weighted index on the Taiwan Stock Exchange closed up 73.90 points, or 0.68 percent, at 10,883.96, after moving between 10,818.24 and 10,899.98, on turnover of NT$126.37 billion (US$4.27 billion).

The market opened up 8.18 points after the Dow Jones Industrial Average and the tech-heavy Nasdaq hit their all-time highs overnight amid optimism over U.S. economic growth, dealers said.

The upward momentum then continued as many Apple suppliers in Taiwan climbed out of their recent doldrums, bolstered by the record quarterly highs in earnings per share and gross margin reported by Largan on Thursday for the fourth quarter, they said.

"The bellwether electronics sector dominated the upturn again as Largan staged a strong technical rebound today," Hua Nan Securities analyst Kevin Su said.

"As a result, the weighted index successfully breached the nearest technical resistance ahead of the 5-day moving average of 10,871 points, which made the market healthier technically."

Largan rose 10 percent, the maximum increase allowed in a single session, to close at NT$4,100.00 after reporting a net fourth quarter profit of NT$8.61 billion, up 10.8 percent quarter-on-quarter and a company record for a single quarter.

It also set new quarterly highs for earnings per share at NT$64.18 and for gross margin at 71.68 percent.

The enthusiasm for Largan spread to other Apple suppliers, with metal casing maker Catcher Technology Co. rising 2.47 percent to close at NT$332.50, and Pegatron Corp., an assembler of smaller iPhones, gaining 3.59 percent to end at NT$75.10.

Taiwan Semiconductor Manufacturing Co., which is said to supply the A11 processor for the latest iPhone production, added 0.85 percent to close at NT$217.00, and Hon Hai Precision Industry Co., the premium iPhone X assembler, rose 0.44 percent to end at NT$91.80.

The bellwether electronics sector closed up 1.02 percent, while the old economy sector appeared mixed as most of the funds were parked in tech stocks, Su said.

In the petrochemical sector, which ended down 0.1 percent, Nan Ya Plastics Corp. fell 1.10 percent to close at NT$81.10, and Formosa Chemicals & Fibre Corp. lost 0.46 percent to end at NT$108.50, while Formosa Plastics Corp. rose 0.50 percent to close at NT$101.50.

The financial sector closed up 0.36 percent, underperforming the broader market, with Cathay Financial Holding Co. closing 0.36 percent higher at NT$55.60, but Mega Financial Holding Co. fell 0.20 percent to close at NT$25.35.

"Despite the gains in the index, turnover was below the average of about NT$132.5 billion in the previous five sessions, indicating the willingness to chase prices was not strong," Su said.

"Many investors preferred to stay on the sidelines before TSMC announces its results next week," he added.

According to the TWSE, foreign institutional investors sold a net NT$217.17 million in shares on the market Friday.

Source: Focus Taiwan News Channel