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Taiwan shares extend gains as tech sector steams ahead

  • Taiwan shares extend gains as tech sector steams ahead
    The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 103.47 points Taiwan shares extend gains as tech sector steams ahead
Region:
Asia
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Economy
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By Focus Taiwan
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The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 103.47 points, or 0.75 percent, at 13,989.14, after moving between 13,894.70 and 13,995.70. Turnover was NT $ 268.76 billion (US $ 9.43 billion).

 

Shares in Taiwan extended their momentum from a day earlier on Wednesday as the bellwether electronics sector moved higher on strong liquidity in the market, dealers said.

Semiconductors provided the biggest boost, spearheaded by contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while old economy and financial stocks generally slid as investors locked in gains built in those stocks, they said.

The weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, closed up 103.47 points, or 0.75 percent, at 13,989.14, after moving between 13,894.70 and 13,995.70. Turnover was NT$268.76 billion (US$9.43 billion).

The market opened up 0.61 percent on follow-through buying from a session earlier, when the Taiex ended up 1.19 percent, and large cap stocks continued to gain ground following a 1.3 percent rise in the tech-heavy Nasdaq index overnight, dealers said.

But as the index approached the 14,000-point mark, momentum stalled, keeping the Taiex just below that milestone to the end of the session, they said.

"The tech sector remained the mainstream of the broader market, and TSMC again dominated trading today," Hua Nan Securities analyst Lu Chin-wei said.

TSMC rose 1.84 percent to close at NT$499.00 after hitting a high of NT$500.00. TSMC's gains alone contributed about 90 points to the Taiex's increase Wednesday, and boosted the electronics sector by 1.34 percent.

"Foreign institutional investors have been net sellers in recent sessions to cash in recent gains, and I think their selling continued today. But local investors served as an anchor for the stock," Lu said, pointing to a net sell of more than 80 million TSMC shares by foreign institutional investors in the previous eight sessions.

On Wednesday, they were also net sellers of NT$255 million in shares across the board.

"TSMC has good fundamentals. I believe foreign institutional investors will return to the buy side after they have completed their portfolio adjustments," Lu said.

"The stock could challenge its historical intraday high of NT$506.00 seen on Nov. 17 in the near future," he said.

Also in the tech sector, memory chipmakers got a boost from rising product prices on solid demand.

Winbond Electronics Corp. rose 10 percent, the maximum daily increase, to close at NT$21.90, and Nanya Technology Corp. gained 5.98 percent to end at NT$81.50.

Bucking the upturn, United Microelectronics Corp., a smaller contract chipmaker, fell 0.24 percent to close at NT$41.45 as investors took advantage of the stock's recent surge.

Lu said the electronics sector accounted for about 75 percent of the total turnover Wednesday, and "it was no surprise that non-tech stocks largely lagged behind."

Among the falling old economy stocks, food brand Uni-President Enterprises Corp. fell 1.21 percent to close at NT$65.30, and rival Wei Chuan Foods Corp. lost 1.15 percent to end at NT$21.40.

Shihlin Paper Co. lost 2.32 percent to close at NT$59.00, and YFY Inc. dropped 3.27 percent to end at NT$23.65.

But China Airlines rose 4.17 percent to close at a 2020 high of NT$10.25, and EVA Airways gained 2.70 percent to end at NT$13.30 on rising cargo demand, which has pushed up freight rates.

"Technical hurdles remain high ahead of 14,000 points and that was why strong buying in the electronics sector failed to vault the index over that level today," Lu said.

The nearest technical support for the Taiex is expected to be 13,700 points if there is a pullback, Lu said.