Shares in Taiwan made a significant comeback yesterday boosted by a record high on the Dow Jones Industrial Average overnight, as investors shrugged off the defeat of a referendum in Italy, dealers said.
The gains posted by high-tech stocks in the US market boosted their counterparts in the local equity market, in particular large-cap electronics stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and smartphone camera lens supplier Largan Precision Co (大立光), they said.
The weighted index on the Taiwan Stock Exchange closed up 90.11 points, or 0.98 percent, at 9,250.77, after moving between 9,209.80 and 9,280.65 on turnover of NT$70.58 billion (US$2.21 billion).
Momentum on the main board accelerated with the bellwether electronics sector steaming ahead on the back of rising blue chips, they said.
“The defeat of the vote on constitutional reforms in Italy had been widely expected in global financial markets,” Mega International Investment Services Corp (兆豐國際投信) analyst Alex Huang (黃國偉) said. “The vote helped the global markets remove an uncertainty.”
Huang said that the euro rebounded after a slump caused by the referendum result, indicating that the impact had been largely absorbed by global financial markets already.
“That is why Taiwan’s market followed Wall Street to move higher. With the index recovering the losses seen a day earlier, it seems that the local main board has become technically healthier for the moment,” Huang said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$6.68 billion of shares on the main board yesterday, Huang said.
The electronics sector closed up 1.08 percent and the semiconductor sub-index ended 1.50 percent higher after TSMC, the most heavily weighted stock on the local market, gained 1.68 percent to close at NT$182 with 27.31 million shares changing hands.
On the back of last month’s sales and an upbeat sales outlook for this month, shares in Largan, a supplier to Apple Inc, increased 2.65 percent to end the day at NT$3,675, remaining the most expensive stock in Taiwan.
After the sales report, one US brokerage left its target price of NT$4,500 for the stock unchanged.
Led by Largan, other “Apple concept stocks” also moved higher, dealers said.
Among them, shares in metal casing maker Catcher Technology Co (可成) advanced 1.29 percent to close at NT$236 and Hon Hai Precision Industry Co. (鴻海) gained 1.23 percent to end at NT$82.3.
Buying also spread to non-high tech stocks. China Steel Corp (中鋼), the nation’s largest steelmaker, rose 1.2 percent to close at NT$25.25, Nan Ya Plastics Corp. (南亞) gained 1.47 percent to end at NT$69.1 and textile maker Far Eastern New Century Corp (遠東新世紀) added 1.69 percent to close at NT$24.
“After today’s gains, the local main board could face stiff technical resistance ahead of 9,300 points,” Huang said. “As turnover remains low, it will not be easy for the index to overcome that hurdle.”
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