The TAIEX closed above the 8,500-point mark yesterday amid rising liquidity levels after foreign institutional investors made net fund inflows last month, stopping a three-month streak of net outflows, dealers said.
Market sentiment was also boosted by a strong showing on Wall Street in the wake of rising international crude oil prices and better-than-expected manufacturing activity data from the US, the dealers said.
Buying rotated to the financial sector — a laggard in the local equity market — providing a boost to the broader market, while some Taiwanese firms in Apple Inc’s supply chain saw their shares rise on bets that their shipments would trend higher when the next-generation range of iPhones are launched later in the year, they said.
The TAIEX’s weighted index closed up 58.36 points, or 0.69 percent, at 8,544.05, after moving between 8,540.17 and 8,586.25, on turnover of NT$100.94 billion (US$3.02 billion).
The market opened 0.69 percent higher in a knee-jerk reaction to an overnight rise on Wall Street, where the Dow Jones Industrial Average closed up 2.11 percent and the S&P 500 index ended up 2.39 percent, the dealers said.
Momentum continued to the end of the session as select large-cap stocks in the financial and electronics sectors moved higher on the back of ample liquidity, they said.
“After heeding the news that foreign institutional investors resumed their moves to pump funds into the local market, investors here seemed to become more willing to raise their holdings, with their appetite for risk expanding,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
According to the Financial Supervisory Commission, foreign institutional investors posted US$1.48 billion in net fund inflows last month.
During the month, the local equity market rose 3.27 percent.
“After trading on the equity market resumed after the Lunar New Year holiday, foreign institutional investors intensified their buying. Under such favorable circumstances, the local stock market has been riding the wave of an uptrend,” Huang said. “Buying in financial heavyweights served as one of the factors to lift daily turnover to top NT$100 billion today.”
In the financial sector, which closed up 1.38 percent, Fubon Financial Holding Co (富邦金控) rose 1.9 percent to end at NT$40.15, Yuanta Financial Holding Co (元大金控) gained 2.3 percent to close at NT$11.1, and Cathay Financial Holding Co (國泰金控) added 3.1 percent to end at NT$38.2.
Among the Apple concept stocks, Hon Hai Precision Industry Co (鴻海精密) — an assembler of iPhones and iPads — rose 2.32 percent to close at NT$79.5. Taiwan Semiconductor Manufacturing Co (台積電), the most heavily weighted stock in the local market, added 0.66 percent to end at NT$153 as the market bet that the chipmaker has secured all of the orders from Apple to supply the processors for the next iPhones.
“Judging from the upturn in recent sessions, I expect that liquidity-driven buying will continue in the local equity market to push up the index to challenge the 250-day moving average to around 8,780 points in the near future,” Huang said.
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