Shares in Taiwan closed above the 9,800-point mark yesterday, with buying sparked by significant gains on Wall Street and the European markets overnight, dealers said.
The bellwether electronics sector gained, led by large-cap stocks, such as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and smartphone camera lens supplier Largan Precision Co (大立光), dealers said.
The financial sector also benefited from bargain hunting after a recent slump, they said.
However, technical resistance was stiff ahead of 9,900 points, as investors waited cautiously to see whether export-oriented high-tech firms would report foreign-exchange losses due to a stronger New Taiwan dollar, dealers said.
The weighted index on the Taiwan Stock Exchange closed up 123.76 points, or 1.27 percent, at the day’s high of 9,841.71, off an early low of 9,737.82. Turnover totaled NT$92.59 billion (US$3.07 billion) during the session.
The market opened up 0.2 percent and gained momentum on buying in electronics and financial heavyweights after world markets rallied.
The Dow Jones Industrial Average closed up 216.13 points, or 1.05 percent, on Wall Street, the German market rose 3.34 percent, and the French market gained 4.17 percent as worry eased over France’s exit from the EU with the emergence of centrist Emmanuel Macron as the frontrunner in that country’s presidential election.
Bargain hunters in Taiwan turned active late in the trading session, pushing up the weighted index past the 9,800-point mark by the close, dealers said.
“While France will still have to hold a run-off election on May 7, Macron’s strong lead over far-right [presidential] candidate Marine Le Pen has calmed the global markets for the moment,” Mega International Investment Services Corp (兆豐國際投信) analyst Alex Huang (黃國偉) said.
“Taking cues from the strong showing on Wall Street and European markets, investors here were willing to pick up bargains today as the local main board had been lagging behind foreign markets,” he said.
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$13.07 billion worth of shares on the main board yesterday.
Driving the gains on the main board, the electronics sector closed up 1.28 percent after TSMC, the most heavily weighted stock in the local market, rose 1.05 percent to end at NT$192.00.
Largan, a supplier to Apple Inc and the most expensive stock in Taiwan, gained 1.53 percent to close at a record high NT$4,970 amid optimism toward its bottom line and its reputation as a leader in production technology.
Also in the high-tech sector, PC brand Asustek Computer Inc. (華碩) finished 2.9 percent higher at NT$302, and Hon Hai Precision Industry Co (鴻海), the world’s largest contract electronics maker, gained 0.93 percent to end at NT$97.9.
In the financial sector, which closed up 1.6 percent, Cathay Financial Holding Co (國泰金) rose 2.54 percent to end at NT$48.50, and Fubon Financial Holding Co (富邦金) gained 1.6 percent to close at NT$47.75.
“Despite today’s solid gains, the main board will continue to face stiff technical resistance ahead of 9,900 points,” Huang said. “It is not easy for the weighted index to hold above that level, since many investors are worried that high-tech firms will report large foreign-exchange losses for the first quarter.”
In related news, the New Taiwan dollar yesterday gained 0.4 percent to reach NT$30.152 against the US dollar in Taipei trading, its highest level in two-and-a-half-years, as more foreign funds flowed into the local bourse, traders said.
The NT dollar tied with the South Korean won as the strongest performer on the currency markets yesterday, a statement by the central bank said.
Turnover was US$1.024 billion at the Taipei Foreign Exchange and Cosmos Foreign Exchange markets.
The NT dollar has strengthened 6.59 percent this year.
Additional reporting by Crystal HSu
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