TAIPEI (CNA) – Taiwan shares spiked more than 100 points in the morning session Monday, in the wake of gains on the United States markets at the end of last week after the U.S. decided not to impose a 5 percent tariff on Mexican imports, dealers said.
The bellwether electronics sector attracted most of the attention on the Taiwan market, particularly contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) and other large-cap stocks, as bargain hunters returned to the trading floor, dealers said.
In addition, some “Mexico concept stocks” in the tech sector — Taiwanese tech companies with production footholds in the Central American country — also helped boost the broader market as they moved higher.
As of 11:47 a.m., the weighted index on the Taiwan Stock Exchange (Taiex) was up 106.45 points, or 1.02 percent, at 10,516.24, on turnover of NT$70.79 billion (US$2.25 billion).
The main board opened 77.03 points, or 0.74 percent, higher, as investors took cues from a 1.02 percent gain on the Dow Jones Industrial Average and a 1.66 percent rise on the tech-heavy Nasdaq index last Friday.
The momentum continued throughout the morning, pushing the Taiex past the 10,500-point mark, dealers said.
The gains on the U.S. markets Friday followed an announcement by U.S. President Donald Trump that he would not impose a 5 percent tariff on Mexican imports since Mexico had agreed to increase its immigration enforcement efforts.
MasterLink Securities analyst Tom Tang said the Taiex has become technically healthier, having breached 10,500 points, the stiff technical resistance point around the 20-day moving average.
“After the long Dragon Boat Festival weekend, the equity market is catching up as investors here were encouraged by the U.S. markets to move to the buy side today,” he said.
The electronics sector was driving the upturn as TSMC, the most heavily weighted stock on the local market, climbed sharply, Tang said.
As of 11:47 a.m., TSMC had risen 2.16 percent to NT$237.50, with 19.45 million shares changing hands, which boosted the Taiex by about 50 points and the tech sector by 1.71 percent.
Also in the electronics sector, integrated circuit designer MediaTek Inc. had climbed 2.44 percent to NT$314.50, IC packaging and testing services provider ASE Technology Holding Co. was 1.70 percent higher at NT$59.70, and iPhone assembler Hon Hai Precision Industry Co. was up 0.84 percent at NT$71.70.
“The deal between the U.S. and Mexico has relieved worry among investors here to some extent so they are scrambling this morning to pick up stocks of companies with production bases in the Central American country,” Tang said.
Among the Mexico concept stocks, Wiwynn Corp., a maker of electronics components, had jumped 8.47 percent to NT$352.00, contract electronics maker Wistron Corp., the parent company of Wiwynn, had risen 4.38 percent to NT$23.85, and notebook computer ODM services provider Inventec Corp. was up 3.05 percent at NT$23.65.
Hon Hai is also one of the Mexico concept stocks, while Wiwynn has more than 60 percent of its total production in Mexico.
“The Taiex might continue its upswing, but that will depend on how China and the U.S. handle their trade disputes,” Tang said.
By Jeffrey Wu and Frances Huang