Record-breaking day for TSMC, Taiex ends with a whimper

(CNA)

TAIPEI (CNA) — Taiwan’s stock market soared early to an all-time intraday high behind Taiwan Semiconductor Manufacturing Co. (TSMC) on Tuesday before tumbling back to the previous day’s close as TSMC could not single-handedly keep the market strong.

The Taiwan Stock Exchange, or the Taiex, rose more than 400 points in the first 20 minutes of trading to hit a record intraday high of 13,031.70, but then slumped the rest of the way to close down 0.01 percent at 12,586.73.

Turnover was a massive NT$343.25 billion, the highest in the Taiwan Stock Exchange’s history.

TSMC continued to dictate the market’s direction, its early surge by the maximum 10 percent to NT$466.50 contributing more than 350 points of the Taiex’s early gains. It also vaulted into the world’s top 10 in market capitalization ahead of Johnson & Johnson and Visa.

The stock later retreated, however, closing up 2.47 percent at NT$435, which still represented a 39 percent gain in the month of July.

Its gains kept the Taiex from a steeper fall after contributing a 327-point increase to the Taiex a day earlier when the overall index rose 284.26 points.

“TSMC’s one-stock show has been rarely seen in decades,” said Shin Kong Investment Trust Co. Chairman Quincy Liu (劉坤錫).

“The broader market has been held together by TSMC the past two days. Yesterday, MediaTek helped out, and today support was seen from LED, Apple-concept and bicycle stocks, which is a healthier trend than yesterday.”

The Taiex rose Monday despite seeing 763 stocks falling and only 150 stocks rising.

“With a NT$1 increase in TSMC equaling an 8.5-point increase in the Taiex, TSMC has accounted for about 90 percent of the index’s gains in the past two days,” Liu said.

Among other gainers in the Apple supply chain Tuesday, iPhone assembler Hon Hai Precision Industry closed 0.5 percent higher at NT$78.40 and smartphone camera lens supplier Largan Precision ended 2.49 percent higher at NT$3,910.00.

Several other electronics stocks were unable to stay in positive territory.

MediaTek ended down 6.59 percent at NT$680 after rising 4 percent early, Marketech International plummeted 7.57 percent to NT$116.00 after early 9 percent gains, and Yageo Corporation fell 5.42 percent to NT$384, off a high of NT$420.

Liu argued that TSMC’s singular success was a result of how well it is positioned in a world where China is “de-Americanizing” and other parts of the world are distancing themselves from China.

“TSMC’s ability to make high-end chips for artificial intelligence, high-performance computing and smart manufacturing applications in the 5G era give it an invaluable role, allowing it to benefit from both the ‘de-Americanization’ and ‘de-Sinicization’ trends,” Liu said.

Tsai Ming-han (蔡明翰), a manager at Cathay Futures, said the Taiex’s recent rise has come to an end for the time being.

He expected the market to remain turbulent in the short term but remained bullish on its mid- and long-term prospects once this period of pressure has passed.