Taipei, Catching up with the rally staged on Wall Street during the Lunar New Year holiday, when Taiwan's stock market was closed, Taiwan shares moved sharply higher Wednesday morning on the first day of trading after the week-long break.
Led by the bellwether electronics sector, the weighted index on the Taiwan Stock Exchange, the Taiex, had gained 273.56 points or 2.63 percent at 10,694.65 as of 10:55 a.m.
The Taiex opened 138.70 points higher, driven by the Dow Jones Industrial Average's 3.6 percent increase and the tech-heavy Nasdaq's 1.4 percent rise during the Lunar New Year holiday, dealers said.
"It's generally the local market catching up today," MasterLink Securities analyst Tom Tang said.
"With large cap stocks, especially in the high-tech sector, attracting buying, the market got off to a good start in the first session of the Year of the Dog," Tang said.
In the electronics sector, contract chipmaker Taiwan Semiconductor Manufacturing Company (TSMC), the most heavily weighted stock in the local market, had gained 2.96 percent to NT$243.50 (US$8.34) as of 10:55 a.m.
Among other tech heavyweights, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., had added 8.70 percent to NT$4,000.00 and integrated circuit designer MediaTek Inc. had risen 5.26 percent to NT$300.00.
Tang said buying also spread to the non-high-tech sector as investors' confidence was reinforced by the gains posted by tech heavyweights.
Among the gaining non-tech stocks, Formosa Plastics Corp. had risen 2.50 percent to NT$103.50 and Nan Ya Plastics Corp. had added 2.89 percent to NT$78.40.
Fubon Financial Holding Co. had gained 1.57 percent to NT$51.80, and Cathay Financial Holding had added 2.08 percent to NT$54.10.
"Despite the catching up, the gains posted still lag behind those in U.S. markets as many investors remain reluctant to chase prices. They are watching to see when foreign institutional investors resume buying after a massive net sell before the Lunar New Year holiday," Tang said.
According to Tang, foreign institutional investors sold a net NT$122.6 billion in one week before Taiwan's market was closed on Feb. 12 for the holiday.
"In addition, some investors fear the Taiex could face stiff technical resistance as it moves closer to the 120-day moving average of 10,725 points," Tang said.
Source: Focus Taiwan News Channel