Shares on the local bourse yesterday staged a technical rebound, ending more than 1 percent higher as investors went bargain hunting after fears of an immediate rate hike by the US Federal Reserve eased, dealers said.
Despite the buying, particularly in heavyweights in the electronics and financial sectors, turnover remained low as many investors preferred to stay on the sidelines, waiting for last month’s sales reports from major high-tech companies, dealers said.
The TAIEX closed up 102.58 points, or 1.14 percent, at 9,090.13, after moving between 9,100.05 and 9,032.38. Turnover totaled NT$62.40 billion (US$1.98 billion) during the session.
The market opened up 0.50 percent in a knee-jerk reaction to a higher Wall Street closing on Friday, when the Dow Jones Industrial Average closed up 0.39 percent and the S&P 500 index ended up 0.42 percent as a US interest rate hike no longer seemed imminent, dealers said.
Other regional markets such as Tokyo, Hong Kong and Seoul also rose, prompting investors to buy into more equities on the Taiwan Stock Exchange.
The TAIEX climbed as investors picked up large cap stocks such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Cathay Financial Holding Co (國泰金控), dealers said.
“I think foreign institutional investors were largely behind today’s gains in the local market since there is now little chance of an immediate interest rate hike by the Fed following the US’ worse-than-expected jobs data for August,” KGI Securities (凱基證券) analyst Phil Chu said. “The Taiwan market simply moved higher in line with others in the region.”
The US on Friday reported that 151,000 new jobs were created last month, far below market expectations of an 180,000 increase, which lowered the chances of a rate hike by the Fed at its policymaking meeting on Sept. 20 and Sept. 21.
“The [New] Taiwan dollar trended higher against the US dollar today, a signal that foreign investors were moving funds into the region,” Chu said.
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