Bucking the global trend, the nation’s stock market and currency both posted modest gains yesterday on reports of a rush of orders for consumer electronic products and an expected inflow of Chinese tourists, analysts said.
The TAIEX closed up 16.43 points, or 0.3 percent, at 4,653 on turnover of NT$84.64 billion (US$2.43 billion), Taiwan Stock Exchange data showed.
The rally defied the fall on Wall Street and other Asian markets, chiefly because of a rush of export orders from China that have prompted some high-tech firms to terminate employees unpaid leave.
Alan Tseng (曾炎裕), an analyst at Capital Securities Corp (群益證券), said domestic and foreign fund managers increased their stakes in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), HTC Corp (宏達電), MediaTek Inc (聯發科) and other manufacturers following reports of a rush of orders from across the Taiwan Strait.
“The TSMC share price alone advanced 8 percent this week,” Tseng said by telephone. “The optimistic sentiment was genuine, though no one knows how long it will last. It is interesting, the TAIEX appeared unaffected by the performance of its counterpart in the US and neighboring nations.”
The weighted index has climbed 92 points, or 2.1 percent, this week, while the electronic and machinery sub-index has risen 5 percent, Tseng said.
Liang Kuo-yuan (梁國源), president of Polaris Research Institute (寶華綜合經濟研究院), said orders had increased following the Lunar New Year holidays and had helped lift production capacity at high-tech firms from 30 percent to 50 percent.
But Liang said it was too early to gauge the impact as the orders may dry up at any time.
Both Tseng and Liang said reports of an upcoming massive influx of Chinese tourists also contributed to the euphoria on the markets.
“True or not, they lured investors to the bourse and they have been buying shares, as can be seen in the increased trade volume this week,” Tseng said.
There was a net investment of NT$3.5 billion in foreign capital into local shares yesterday.
Likewise, the New Taiwan dollar rebounded 0.047 percent, or NT$0.17, to NT$34.78 against its US counterpart, after weakening to below the NT$35 level on Monday, foreign exchange data showed.
Total transactions amounted to US$1.919 billion on Taipei Forex Inc and the smaller Cosmos Foreign Exchange.
A dealer from a local bank said institutional players had hesitated to challenge the NT$35.3 barrier for fear of losses because the central bank has ample foreign exchange reserves.
“Let’s wait and see how long the rebound can hold,” he said by telephone.
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