TAIPEI (CNA) – Shares in Taiwan closed higher Monday on the back of rotational buying that benefited select high-tech stocks and boosted the entire electronics sector, as well as the broader market, as investors were encouraged by gains on Wall Street at the end of last week to buy, dealers said.
Solar energy firms also jumped amid hopes that three major players in the local market – Neo Solar Power Corp. (新日光), Gintech Energy Corp. (昱晶) and Solartech Energy Corp. (昇陽光電) – would announce a merger deal later in the day, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 50.12 points, or 0.47 percent, at the day’s high of 10,774.21, off an early low of 10,723.37, on turnover of NT$125.66 billion (US$4.17 billion). The closing level was a new high since April 4, 1990, when the index ended at 10,907.09.
The market opened up 0.10 percent in reflection of another record high on Wall Street, where the Dow Jones Industrial Average closed up 0.13 percent after hitting an intraday high, and the tech-heavy NASDAQ index ended at a record high the previous Friday amid optimism toward corporate earnings, the dealers said.
Momentum continued as investors rushed to pick up bargains in the high-tech sector such as contract PC maker Quanta Computer Inc. (廣達) and smartphone camera lens supplier Largan Precision Co. (大立光), while solar energy stocks posted significant gains, pushing up the broader market even higher, the dealers added.
“Wall Street continued to steam ahead, serving as a driver for the local equity market upturn,” Taishin Securities Investment Advisory analyst Tony Huang said. “It seemed that market sentiment improved a lot, with many investors willing to chase prices for the moment,” he added.
Huang said the electronics sector lifted the broader market, as buying rotated to select heavyweights that had been consolidated in recent sessions. Among them, Quanta gained 7.09 percent to close at NT$74.00, and Largan rose 4.05 percent to end at NT$5,755.00.
Also in the electronics sector, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, rose 0.21 percent to close at NT$238.00, and Hon Hai Precision Industry Co. (鴻海), an iPhone assembler and second only to TSMC in terms of market capitalization, grew 1.39 percent to end at NT$109.50.
Buying also spread to the solar energy segment before Neo Solar Power, Gintech Energy and Solartech Energy announced the largest-ever merger deal in Taiwan’s solar energy business after the market closed, Huang said. Trading of the three solar cell makers was suspended pending Monday’s announcement.
Among the rising solar energy stocks, solar wafer maker Gigastorage Corp. (國碩) rose 10 percent, the maximum daily increase, to end at NT$21.45, while solar cell suppliers Green Energy Technology Inc. (綠能) and Motech Industries Inc. (茂迪) also gained 10 percent to end at NT$20.00 and NT$29.95, respectively.
In the textile sector, which closed up 1.02 percent on bargain- hunting sparked by a recovery in product prices, Eclat Textile Co. (儒鴻) rose 4.35 percent to close at NT$371.50, and Makalot Industrial Co. (聚陽) gained 1.14 percent to end at NT$133.00.
“I expect further gains in local share prices, but how far the index will go will depend on the ongoing earnings season,” Huang said.
TSMC has scheduled an investor conference for Oct. 19 to detail its third-quarter results and give its fourth-quarter sales guidance. •
By Frances Huang