Shares in Taiwan staged a significant rebound on Monday after slumping last week, propelled higher by buying in Taiwanese suppliers to Apple Inc. after the latest iPhone models received a warm reception in the global market, dealers said.
Heavy buying boosted turnover to nearly NT$100 billion (US$3.18 billion), a level that had not been seen since mid-July, helping the broader market breach the 9,100-point mark by the end of the session, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) closed up 250.58 points, or 2.81 percent, at 9,152.88, after moving between 9,003.41 and 9,155.38 on turnover of NT$96.99 billion.
The market opened up 1.14 percent as major "Apple concept stocks" immediately pushed higher, fueled by an 11 percent increase in Apple's share price last week on strong pre-order sales and global sales figures for the new iPhone 7 and iPhone 7 Plus, dealers said.
The early buying vaulted the weighted index above 9,000 points, and momentum accelerated as large-cap old-economy and financial stocks joined the upturn to push the broader market above 9,100 points by the end of the session, they said.
"Look at the expanded turnover. I think foreign institutional investors shifted to the buy side, scrambling to pick up heavyweights in the bellwether electronics sector throughout the session," Hua Nan Securities analyst Henry Miao said.
Monday's turnover was the highest since July 21, when it hit NT$100.65 billion.
According to the TWSE, foreign institutional investors bought a net NT$11.27 billion in shares on the market Monday, reversing a net sell of NT$6.89 billion in shares on Sept. 14, a day before the four-day Mid-Autumn Festival holiday.
"Thanks to the solid gains posted by Apple shares last week, investors here simply wanted to play catch-up by buying into Apple concept stocks amid optimism toward sales of the new iPhones," Miao said.
T-Mobile, a major telecom service provider in the United States, said iPhone 7 pre-orders were at record levels, almost four times higher than in 2014 when the iPhone 6 was released.
Since the first round of global sales of the new iPhones started on Friday, some models have already sold out, Apple said. Market sources said a backlog of orders for the jet black iPhones, the most popular version, will last into November.
Among the suppliers to Apple, Taiwan Semiconductor Manufacturing Co. (TSMC, ???), which supplies the A10 processor for the iPhone 7, gained 5.19 percent to close at NT$182.50, with 56.96 million shares changing hands. TSMC is the most heavily weighted stock in Taiwan.
Largan Precision Co. (???), a smartphone camera lens supplier to Apple, rose 5.70 percent to end at NT$3,800.00, and Hon Hai Precision Industry Co. (??), an assembler of iPhones and iPads, added 3.88 percent to close at NT$80.40.
Led by the significant gains posted by these large-cap stocks, the bellwether electronics sector ended up 3.60 percent.
Buying also spread to the non-high-tech sector to send the index even higher. Among the gaining old economy stocks, Formosa Plastics Corp. (??) added 1.98 percent to close at NT$77.40, and Nan Ya Plastics Corp. rose 2.02 percent to end at NT$60.60.
In the financial sector, which closed up 2.05 percent, Fubon Financial Holding Co. (???) rose 2.70 percent to end at NT$45.70, and Cathay Financial Holding Co. (???) gained 2.29 percent to close at NT$40.20.
"After today's strong gains, the local market could see stiff technical resistance ahead of 9,200 points," Miao said.
"Also, valuations on Wall Street have been high. I'm afraid that any comments from the U.S. Federal Reserve hinting at a rate hike will create volatility in the U.S. market, hurting Taiwan's market."
The Fed will hold a policymaking meeting on Sept. 20 and 21.
Source: Focus Taiwan News Channel