Taipei, May 21 (CNA) Taiwan shares moved sharply higher in the Monday morning session to breach the 10,900 point mark after the United States and China said over the weekend that they have agreed to put trade tariffs on hold, while continuing talks to resolve their trade disputes, dealers said.

The bellwether electronics sector led the upturn on the local main board with Apple concept stocks in focus, while buying was also seen in old economy stocks, in particular in the petrochemical sector on the back of a spike in international crude oil prices, they said.

As of 11:02 a.m., the weighted index on the Taiwan Stock Exchange or the Taiex had gained 123.65 points or 1.14 percent to reach 10,954.49 on turnover of NT$70.76 billion (US$2.36 billion).

“Judging from the current strong showing, I think that investors have been relieved to some extent after Washington and Beijing agreed not to impose tariffs on products sold to each other’s markets to put a possible trade war on hold,” Hua Nan Securities analyst Kevin Su said.

“Worries over escalating trade disputes had capped the gains posted by the local equity market in recent sessions. Now, eased concerns over the matter prompted investors to pick up stocks soon after the market opened with momentum keeping going,” Su said.

In a joint statement released on Saturday after the latest round of negotiations between the U.S. and China, the two countries said Beijing will “significantly increase” its purchases of U.S. products and services to reduce a trade imbalance with Washington.

In an interview with Fox News on Sunday, U.S. Treasury Secretary Steven Mnuchin said China and the U.S. were “putting the trade war on hold.” He added both sides will continue negotiations to reach an agreement.

Su said high tech stocks were highlighted in current buying with the electronics sector up 1.73 percent as of 11:02 a.m.

Among the gaining electronics heavyweights, shares in Taiwan Semiconductor Manufacturing Co. (TSMC), which is believed to supply the A11 processor for the latest iPhones, had risen 2.68 percent to NT$229.50 with 10.13 million shares changing hands.

“But, the stock could face stiff technical resistance ahead of the 240-day moving average of NT$230 in the short term,” Su said. TSMC is the most heavily weighted stock in Taiwan.

Among other “Apple concept stocks,” iPhone assembler Hon Hai Precision Industry Co. had added 1.43 percent to reach NT$85.10, and Largan Precision Co., a smartphone camera lens supplier to Apple, had gained 1.12 percent at NT$4,055.

Su said the gains enjoyed by these large cap stocks came from active bargain hunters who simply seized on the development in trade talks between the U.S. and China to take advantage of recent losses suffered by the stocks.

“Buying also spread to the old economy sector focusing on petrochemical stocks this morning, while the financial sector steamed ahead to push up the broader market,” Su said.

In the petrochemical sector, which was boosted by higher international crude oil prices, Formosa Chemicals & Fibre Corp. had added 0.43 percent to NT$118.00, while Formosa Petrochemical Corp. had risen 1.21 percent to NT$125.50.

Among the gaining financial stocks, shares in Mega Financial Holding Co. had risen 1.12 percent to NT$27.00, and Cathay Financial Holding Co. had added 0.37 percent to NT$54.60

“After breaching the 10,900 point mark, market sentiment has improved,” Su said. “It is possible the local main board could challenge the 11,000 point level later this week.”

Su said trading volume on Monday is expected to reach NT$130 billion.

(By Frances Huang)