TAIPEI (CNA) — Shares in Taiwan extended their momentum from a session earlier Wednesday, rising more than 100 points to close above the 10,400 point mark in the wake of a rally on U.S. markets overnight amid expectations that the worst of the COVID-19 pandemic may have passed, dealers said.
While the bellwether electronics sector continued its uptrend, buying in the financial sector and select old economy stocks, in particular in the tourism and transportation sectors, was strong, pushing the broader market higher, they said.
The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex ended up 114.27 points, or 1.11 percent, at 10,447.21, after moving between 10,366.77 and 10,461.84, on turnover of NT$191.13 billion (US$6.37 billion).
The market opened up 0.33 percent and buying quickly accelerated, vaulting the Taiex past 10,400 points in the early morning session as investors took their cue from the significant gains posted on the U.S. markets, where the Dow Jones Industrial Average ended up 2.39 percent Tuesday, dealers said.
The rally on the Dow came after President Donald Trump said he has enlisted advisers to help shape his plans to reopen the coronavirus-battered U.S. economy, the largest in the world, which has raised hopes the peak of the COVID-19 contagion may have been passed, dealers added.
The strength on the local main board continued for the rest of the session on the back of strong buying, helping the Taiex to close nearly at the day’s high, dealers said.
It was the first time the Taiex has closed above 10,400 points since March 12, when the index ended at 10,422.32.
“The latest strong showing on Wall Street prompted many local bargain hunters to come out and buy,” Concord Securities analyst Kerry Huang said. “Trump’s statement, in particular, boosted expectations that the contagion in the U.S. is easing.”
Huang said such an upbeat mood was largely reflected by solid buying in tourism and transportation stocks throughout the session as bargain hunters rushed to buy into the two sectors, which have been badly hit by the COVID-19 pandemic.
“But, I prefer to keep alert over how the U.S. economy will develop despite Trump’s move,” Huang said. “The economy has been hurt badly by the virus spread and few can be sure when it will stage a meaningful rebound,” Huang said.
Among the gaining tourism stocks, Lion Travel Service Co. rose 10 percent, the maximum daily increase, to close at NT$70.90, Formosa International Hotels Corp. also soared 10 percent to end at NT$131.00, and The Ambassador Hotel Ltd. added 2.84 percent to close at NT$25.35.
In the transportation sector, China Airlines rose 2.07 percent to close at NT$7.42 and rival EVA Airways added 3.90 percent to end at NT$10.65.
Huang said although the electronics sector, which has outperformed the broader market in recent sessions, continued to steam ahead Wednesday, buying was uneven as some investors locked in their recent gains.
“Fortunately, TSMC (Taiwan Semiconductor Manufacturing Co.) remained in positive territory to drive up the entire tech sector,” Huang said.
TSMC, the most heavily weighted stock on the local market, rose 0.88 percent to close at NT$287.50, after hitting a high of NT$288.50. Led by TSMC, the electronics sector and the semiconductor sub-index closed up 0.90 percent and 0.72 percent, respectively.
Yageo Corp., a producer of chip resistors, inductors and multi-layer ceramic capacitors (MLCC), rose 1.63 percent to end at NT$343.50 after the company announced it will list global depository receipts in Luxembourg next week. Rival Walsin Technology Corp. rose 10 percent to close at NT$198.00.
Bucking the upturn on the broader market, iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market capitalization, fell 0.40 percent to close at NT$74.10, and Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc., lost 0.39 percent to end at NT$3,800.00.
In the financial sector, which rose 1.68 percent on bargain hunting, E. Sun Financial Holding Co. rose 2.30 percent to close at NT$26.65, CTBC Financial Holding Co. added 1.27 percent to end at NT$19.90, and Fubon Financial Holding Co. grew 0.98 percent to close at NT$41.05.
Despite the gains on the Taiex, foreign institutional investors sold a net NT$3.68 billion worth of shares on the main board Wednesday, according to the TWSE.