Taiwan shares soar almost 200 points after U.S. rally

Taiwan's shares (CNA)

TAIPEI (CNA) — Shares in Taiwan rose almost 200 points Wednesday with investors encouraged by a rally on U.S. markets overnight, as lockdowns aimed at containing COVID-19 are eased, dealers said.

Buying focused on large cap stocks, in particular in the bellwether electronics sector, and spread to old economy and financial stocks, pushing up the local main board which ended above 11,300 points on expanded turnover, they said.

The weighted index on the Taiwan Stock Exchange (TWSE) or the Taiex closed up 192.23 points, or 1.73 percent, at 11,320.16, after moving between 11,182.52 and 11,330.52, on turnover of NT$211.3 billion (US$ 7.6 billion).

The market opened up 0.49 percent on follow-through buying from a session earlier, when the Taiex ended up 0.44 percent, and buying increased until the end of the session on the back of strong gains posted on Wall Street, where the Dow Jones Industrial Average rose 1.05 percent, with market sentiment boosted by optimism over the economic reopening, dealers said.

“Judging from today’s turnover, I think investors were willing to chase prices because they are optimistic over economic reopening,” Concord Securities analyst Kerry Huang said. On Tuesday, turnover stood at NT$182.41 billion.

“Taiwan is not the only market in the region to steam ahead. Others (such as Hong Kong, Seoul and Tokyo) also had a strong showing as investors in the region put tensions between Washington and Beijing behind them for the moment and shifted their attention to business revival,” Huang said.

Market heavyweights in the tech sector remained a driver to the solid gains on the main board Wednesday, with the electronics sector up 1.64 percent, Huang added.

“The gains were largely driven by ample liquidity as foreign funds continue to flock into the region to pick up large cap stocks like TSMC (Taiwan Semiconductor Manufacturing Co.),” Huang said.

TSMC, the most heavily weighted stock on the local market, rose 1.52 percent to close at the day’s high of NT$301.00. Buying spread to other integrated circuit stocks with smartphone IC designer MediaTek Inc. up 1.03 percent to end at NT$490.00 and display driver IC designer Novatek Microelectronics Corp. up 1.19 percent to end at NT$213.00.

Also in the tech sector, shares in iPhone assembler Hon Hai Precision Industry Co. rose 1.30 percent to close at NT$78.10, and smartphone camera lens maker Largan Precision Co. added 4.53 percent to end at NT$4,270.00.

In the financial sector, which rose 1.84 percent, Cathay Financial Holding Co. rose 2.22 percent to close at NT$20.75 percent and Cathay Financial Holding Co. added 2.60 percent to end at NT$41.40.

Among gaining old economy stocks, Formosa Plastics Corp. rose 2.14 percent to close at NT$86.10, and Formosa Chemicals & Fibre Corp. grew 2.32 percent to end at NT$74.90.

“High liquidity could continue to push up the Taiex, but I expect strong technical resistance will be seen at around 11,500 points,” Huang said.

According to the TWSE, foreign institutional investors bought a net NT$17.64 billion worth of shares on the main board Wednesday.