Taiwan stocks bounce back from correction

Nick Land, The China Post

Taiwan’s stock market recovered its uptrend yesterday, climbing 2.5 percent or 110.10 points to 4,514.10. Turnover for the session rose moderately to NT$55.6 billion from Tuesday’s NT$35.7 billion.

Despite continued weakness on Wall Street and dismal July trade data market sentiment was generally upbeat, with dealers treating negative news as thoroughly discounted by previous falls and the local market now fully corrected after two days of slippage. Shares rose from the beginning of the session, guided upward by technical trades. Broadly based bargain-hunting helped the market break through strong resistance at the 4,500-points barrier shortly before the close.

Foundry majors TSMC and UMC shrugged off continuing declines in their U.S. listings to register positive adjustments, with TSMC making up most of Tuesday’s fall by gaining 2.3 percent to NT$67.5, and UMC ending up 1.3 percent at NT$37.7.

Financials rebounded strongly despite weak fundamentals, with the “Big 3” commercial banks gained 6.2-6.7 percent.

All other sectors were up on aggregate, with traditional industrials outperforming electricals.

Transportation titles benefited from expectations of a relaxation in relevant cross-strait regulations. Evergreen Marine rose 6.7 percent to NT$14.35. Dealers were generally confident that the market could consolidate support around the 4,500-point level, although a strong upward trend would probably require further incentives – in particular from U.S. tech-stock performance – at this stage.