Taiwan shares staged a strong technical rebound Monday morning, up more than 400 points, from heavy losses seen a week earlier as investors took cues from the gains enjoyed by the U.S. markets at the end of last week, dealers said.
The bellwether electronics sector led the upturn as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) bounced back from its recent doldrums, while buying was also seen among shipping stocks which had come under pressure in recent session after the Cabinet agreed to extend a transaction tax cut for another three years, dealers said.
As of 11:23 a.m., the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), had soared 403.79 points, or 2.47 percent, at 16,745.73 on turnover of NT$259.04 billion (US$9.25 billion).
The market opened up 0.71 percent and soon saw momentum accelerating in a knee-jerk reaction to a 0.65 percent increase on the Dow Jones Industrial Average and a 1.19 percent rise on the tech-heavy Nasdaq index on Friday as a Federal Reserve official toned down his hawkish attitude toward the tightening of the monetary policy, dealers said.
“After last week’s tumble, investors here took cues from the U.S. markets’ gains to pick up bargains after Dallas Federal Reserve President Robert Kaplan’s comments,” MasterLink Securities analyst Tom Tang said.
Last week, the Taiex plunged 640.17 points or 3.77 percent amid fears that the Fed will scale down its bond purchases later this year.
On Friday, Kaplan, who was among the hawkish Fed officials on the monetary policy, said he was likely to adjust his view if an escalation of the Delta variant affects economic growth materially.
“So, large cap stocks which lost ground significantly attracted bargain hunting soon after the local equity market opened,” Tang said. “TSMC led the gains and its upturn boosted the Taiex by about 200 points.”
As of 11:23 a.m., TSMC, the most heavily weighted stock in the local market, had gained 3.08 percent to NT$569.00. Led by TSMC, the electronics sector had risen 2.61 percent with the semiconductor sub-index up 3.27 percent.
Among other tech heavyweights, United Microelectronics Corp., a smaller contract chipmaker, had gained 4.85 percent to NT$58.40, and integrated circuit designer MediaTekc Inc. had added 3.78 percent to NT$906.00.
Moreover, the shipping industry also steamed ahead, helping to drive up the broader market after the tax cut, Tang said.
Among the industry’s key players, Evergreen Marine Corp., the largest container cargo shipper in Taiwan, had risen 8.30 percent to NT$143.50, and rival Wan Hai Lines Ltd. had gained 10 percent, the maximum daily increase, to NT$248.00.
“The nearest technical resistance for the Taiex could emerge after the market moves closer to 16,900 points,” Tang said.
Source: Focus Taiwan News Channel
