Taipei, April 26 (CNA) Shares in Taiwan moved sharply higher Friday on buying in the bellwether electronics sector fueled by a rally among semiconductor stocks on markets in the United States overnight, dealers said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 263.09 points, or 1.32 percent, at 20,120.51 after moving between 20,087.61 and 20,226.29. Turnover totaled NT$418.70 trillion (US$12.85 trillion).
The market opened up 1.19 percent, immediately vaulting the Taiex over the 20,000-point mark, with large-cap semiconductor stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), drawing interest.
They benefited from a 1.96 percent rise in the Philadelphia Semiconductor Index on Thursday amid continued enthusiasm towards artificial intelligence development, dealers said.
Momentum in Taiwan continued until about 10:30 am behind TSMC and other tech heavyweights, including smartphone IC designer MediaTek Inc., pushing the Taiex above the 20-day moving average of 20,222 points, at one point, dealers added.
The market traded in a relatively narrow range after that.
“Investors here largely ignored a (0.98 percent) fall in the Dow Jones Industrial Average due to slower growth in the US economy in the first quarter. They shifted their attention to semiconductor stock gains in the US,” Concord Securities analyst Lu Chin-wei said.
“Today, TSMC was back in the spotlight again after yesterday’s slump as investors seized on the US rally to pick up bargains,” Lu said.
After falling 2.17 percent on Thursday, TSMC closed 2.09 percent higher on Friday at NT$782.00. TSMC’s gains contributed about 130 points alone to the Taiex’s rise and helped push the electronics index and semiconductor sub-index 1.70 percent and 2.31 percent higher, respectively.
“Judging from TSMC’s performance, the stock remained volatile due to the wild fluctuations of its counterparts on US markets,” Lu said.
“The stock has fallen into consolidation between NT$734 and NT$786 but I have to emphasize that TSMC remains fundamentally sound.”
The buying in TSMC spread to other large-cap semiconductor stocks.
MediaTek closed up 2.45 percent at NT$1,005.00, and Scientech Corp., a TSMC equipment supplier, ended 2.60 percent higher at NT$335.00.
Lu said the interest in MediaTek came as investors were betting that it was going to give positive leads at an investor conference Friday afternoon.
Also boosted by the AI boom, TSMC’s application-specific integrated circuit (ASIC) design subsidiary Global Unichip Corp. and Alchip Technologies Ltd., another ASIC designer, surged 10 percent, the maximum daily increase, to end at NT$1,320.00 and NT$3,110.00, respectively.
Bucking the upturn, IC packaging and testing services provider ASE Technology Holding Co. lost 1.72 percent to end at NT$142.50 after the company reported a sequential 40 percent fall in net income for the first quarter on slow season effects.
“Outside the semiconductor industry, Hon Hai also staged a rally due to its relatively low valuation, giving an additional boost to the Taiex throughout the session,” Lu said.
After forecasting AI server sales will grow more than 40 percent in 2024, iPhone assembler Hon Hai rose 2.31 percent to close at NT$155.00, while Quanta Computer Inc., another AI server maker, added 0.78 percent to end at NT$257.50.
In the old economy sector, the transport index rose 4.40 percent.
China Airlines gained 5.39 percent to end at NT$21.50, and EVA Airways closed 6.70 percent higher to end at NT$36.65 after China’s Taiwan Affairs Office said earlier this week that it will push for cross-Taiwan Strait exchanges, including tourism.
The construction index rose 2.15 percent, as Lu said that at a time of inflationary pressure, investors favored construction stocks because many consumers like buying homes to take on inflation.
Among the rising construction stocks, Cathay Real Estate Development Co. surged 10 percent to close at NT$37.80, and Huang Hsiang Construction Co. gained 4.95 percent to end at NT$57.20.
In the financial sector, which rose 0.42 percent, Fubon financial Holding Co. gained 1.81 percent to close at NT$67.60, and Cathay Financial Holding Co. ended up 0.72 percent at NT$48.90.
“After the Taiex plunged 774 points on April 19, the local market became technically unstable, and that’s why the index has moved sharply up and down since then,” Lu said.
“Although the index returned to 20,000 points today, I do not rule out the possibility that the market will test that level again as the earnings season in the US could continue to affect market sentiment,” Lu added.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$20.51 billion in shares Friday.
(By Frances Huang)
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