Taiwan shares soar on eased concerns over U.S.-China trade tension

Taipei, Shares in Taiwan strengthened from a session earlier, soaring more than 100 points Wednesday as buying was sparked by reduced concerns over trade friction between the United States and China, dealers said.

The selling pressure was eased by U.S. President Donald Trump, who talked up the progress of trade talks with China, prompting investors here to pick up large-cap stocks, in particular in the bellwether electronics sector, which pushed up the broader market past the 9,800-point mark by the end of the session, the dealers said.

The weighted index on the Taiwan Stock Exchange (TWSE), or Taiex ended up 109.41 points, or 1.13 percent, at 9,816.45, after moving between 9,741.45 and 9,835.56, on turnover of NT$96.32 billion (US$3.12 billion).

The market opened slightly higher, up 0.35 percent, in reflection of mixed performance in U.S. markets overnight, and buying increased as market sentiment was boosted by Trump's upbeat comments on the trade talks with China, the dealers said.

The bellwether electronics sector led the upturn, with tech heavyweights such as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and iPhone assembler Hon Hai Precision Industry Co. in focus, they said.

"Like other regional markets, the Taipei market was bolstered by optimism toward the ongoing trade talks between Washington and Beijing," Hua Nan Securities analyst Kevin Su said, referring to markets such as Tokyo, Hong Kong and Seoul.

In a Twitter post, Trump said: "Very productive conversations going on with China! Watch for some important announcements!" The U.S. and China agreed in the G20 summit that ended Dec. 1 to enter negotiations with a deadline of March 1 to resolve their trade dispute.

"Such a positive tone from Trump," Su said, "motivated many investors in the region to buy today."

In addition to Trump's Twitter message, news reports also said China would cut tariffs on cars imported from the U.S. to 15 percent from 40 percent, another positive sign that the two sides could strike a deal during the trade talks, Su said.

"It was not surprising that investors appeared more willing to buy today, rushing to buy into large-cap stocks, especially in the bellwether electronics sector, sending the Taiex significantly higher," Su said.

Among the tech heavyweights, TSMC, the most heavily weighted stock in the local market, rose 1.80 percent to close at NT$226.50, with 26.46 million shares changing hands. The gains posted by TSMC boosted the Taiex by about 40 points.

Led by TSMC, the electronics sector closed up 1.78 percent and the semiconductor sub-index ended up 1.92 percent.

In addition to TSMC, Hon Hai, another Apple concept stock, rose 4.09 percent to end at NT$71.20 in the wake of news that company chairman Terry Gou (???) spent about NT$2 billion to raise his stake in the firm from 9.36 percent a month earlier to 9.55 percent at the end of November.

Largan Precision Co., a smartphone camera lens supplier to Apple Inc., gained 5.35 percent to close at NT$3,345.00, and integrated circuit designer MediaTek Inc. rose 2.19 percent to end at NT$233.00.

Su said that while the electronics sector served as a driver to the broader market's gains, buying in the old economy and financial sectors was relatively insignificant.

Among the gaining old economy stocks, food brand Uni-President Enterprises Corp. rose 0.73 percent to close at NT$69.40 and Formosa Chemicals and Fibre Corp. added 0.96 percent to end at NT$105.50.

In the financial sector, which closed up only 0.09 percent, Fubon Financial Holding Co. rose 0.63 percent to end at NT$47.55, while CTBC Financial Holding Co. fell 0.50 percent to close at NT$19.90.

"After today's gains, the local main board is expected to face the next stiff technical resistance ahead of 10,000 points," Su said, adding that "I am afraid that it will not be easy for the Taiex to overcome the hurdles anytime soon, since more and more foreign institutional investors are expected to leave the trading floor for the Christmas and New Year holidays, which will cap turnover."

Despite the gains, foreign institutional investors sold a net NT$2.04 billion-worth of shares on the main board Wednesday, according to the TWSE.

Source: Focus Taiwan News Channels