Taipei, April 24 (CNA) Shares in Taiwan moved sharply higher Wednesday to close above the 20,000-point mark, spurred on by a rally on markets in the United States overnight, dealers said.
The bellwether electronics sector led the gains, mirroring tech stocks’ performance in the US, which were boosted by hopes of a rate cut by the Federal Reserve after new data showed a slowdown in US manufacturing activity, dealers said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 532.46 points, or 2.72 percent, at 20,131.74 after moving between 19,770.46 and 20,165.77. Turnover totaled NT$427.56 billion (US$13.14 billion).
The market opened up 0.87 percent after a 1.59 percent increase on the tech-heavy Nasdaq index and a 2.21 percent rise on the Philadelphia Semiconductor Index on Tuesday, dealers said.
Momentum then accelerated, focusing on large-cap semiconductor and artificial intelligence-related stocks, and continued to the end of the session to push the Taiex above 20,000 for the first time since April 19, when it plunged 774 points to fall below that threshold.
Strong gains on US markets overnight
“Judging from today’s movement, I think many investors who were downbeat about the Taiex’s outlook on April 19 rushed back to buy after seeing the strong gains on US markets overnight after the weak manufacturing data,” said Moore Securities Investment Consulting analyst Adam Lin.
The latest S&P Global Flash US PMI Composite Output Index data, released Tuesday, showed that the index fell to a four-month low of 49.9 in April, compared with 51.9 in March. PMI scores below 50 indicate contraction.
“It seemed many investors had higher expectations of a rate cut by the Fed and jumped into the market,” Lin said. “Bargain hunters focused their attention on tech stocks, in particular TSMC (Taiwan Semiconductor Manufacturing Co.).”
TSMC, the most heavily weighted stock in the local market, rose 3.85 percent to close at NT$783.00.
The stock’s gains contributed about 235 points alone to the Taiex’s increase and sent the electronics index and semiconductor sub-index higher by 3.88 percent and 3.82 percent, respectively.
TSMC’s buying spread to other semiconductor heavyweights with smartphone IC designer MediaTek Inc. up 3.91 percent to close at NT$1,010.00, and United Microelectronics Corp., a smaller contract chipmaker, gaining 3.08 percent to close at NT$50.20.
Other tech stocks
IC packaging and testing services provider ASE Technology Holding Co. gained 2.07 percent to end at NT$148.00, DRAM chip supplier Nanya Technology Corp. rose 4.30 percent to close at NT$65.50, and application specific integrated circuit (ASIC) designer Alchip Technologies Ltd. added 4.02 percent to end at NT$2,975.00.
Led by a 3.65 percent increase in US-based AI chip designer Nvidia Corp., Taiwan’s AI related stocks largely moved higher to boost the computer and peripheral sub-index by 5.48 percent, dealers said.
Among these stocks, AI server maker Quanta Computer Inc. surged 10 percent, the maximum daily increase, to close at NT$260.50, rival Wistron Corp. gained 4.05 percent to close at NT$115.50, and Giga-Byte Technology Co., a leading graphics card vendor for AI applications, rose 6.58 percent to close at NT$299.50.
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co., which has forecast its AI server sales will grow more than 40 percent in 2024, jumped 8.33 percent to end at NT$156.00.
Non-tech stocks
“As the electronics sector attracted most of the buying today, non-tech stocks largely lost their luster,” Lin said. “The electric machinery industry was an exception, largely due to the gains by US energy storage stocks overnight.”
In the electric machinery industry, which rose 3.68 percent, Chung-Hsin Electric & Machinery Manufacturing Corp. gained 3.18 percent to close at NT$194.50, and Shihlin Electric & Engineering Corp. added 2.43 percent to end at NT$316.00.
In addition, Fortune Electric Co. rose 3.52 percent to close at NT$854.00, and Allis Electric Co. added 3.87 percent to end at NT$161.00.
Elsewhere in the old economy sector, food brand Uni-President Enterprises Corp. loses 1.79 percent to close at NT$77.00, while Wei Chuan Foods Corp. ended unchanged at NT$18.70.
In the financial sector, which rose only 0.05 percent, Mega Financial Holding Co. lost 1.63 percent to close at NT$39.35, while Cathay Financial Holding Co. gained 1.03 percent to end at NT$49.25.
Technicals, US earnings
“After today’s showing strong, the Taiex could see stiff technical resistance ahead of the 20-day moving average of 20,240 points,” Lin said.
“The US markets are expected to affect the direction of the local market, so investors need to keep a close eye on the current earnings season.”
Meta will report its earnings on Wednesday, while the results of Google parent company Alphabet and Microsoft will be reported Thursday.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$29.83 billion in shares on the market Wednesday.
(By Frances Huang)
Enditem/ls
