Shares in Taiwan on Friday closed higher to return to 10,500 points as contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) benefited from late-session interest, pushing up the broader market, dealers said.
However, turnover fell to less than NT$100 billion (US$3.33 billion) amid lingering fears over further foreign institutional selling after a focus on selling in recent sessions, they said.
The TAIEX closed up 48.30 points, or 0.46 percent, at the day’s high of 10,537.27, off an early low of 10,486.52, on turnover of NT$91.01 billion. That compared with a close of 10,491.44 on Dec. 15, a weekly increase of 0.4 percent.
The market opened up 0.13 percent on a mild technical rebound from a slump the previous session as local investors took their cue from the gains posted by Wall Street, where the Dow Jones Industrial Average closed up 0.23 percent and the S&P 500 ended up 0.20 percent, dealers said.
The local weighted index quickly fell into consolidation mode for most of the session before buying emerged later on with TSMC, the most heavily weighted stock in the local market, pushing up the market to the highest level of the day, they said.
“TSMC has been under pressure in recent sessions, but the stock managed itself well to move above a recent intraday low of NT$223.50,” KGI Securities Co (凱基證券) analyst Phil Chu said. “It was time for TSMC to bounce back.”
TSMC rose 1.11 percent to close at NT$227.50, off an early low of NT$224, with 19.02 million shares changing hands.
Led by TSMC, the bellwether electronics sector ended up 0.61 percent and the semiconductor subindex closed up 0.67 percent.
“I think negative leads, including a reported 30 percent cut in orders by Apple Inc for the first quarter of next year, have been priced into TSMC shares,” Chu said. “The market has anticipated that the chipmaker will then go through slow season effects in the first quarter.”
Also in the electronics sector, iPhone assembler Hon Hai Precision Industry Co (鴻海精密), second to TSMC in terms of market value, added 0.65 percent to close at NT$92.90 and Largan Precision Co (大立光), a smartphone camera lens supplier to Apple, gained 1.69 percent to end at NT$4,200.
Shares in Acer Inc (宏碁), one of the world’s leading PC brands, soared 10 percent, the maximum daily increase, to close at NT$22.65, with investors impressed by the firm’s gross margin, which hit a 13-year high for the first nine months of this year.
In the financial sector, which moved up 0.51 percent on the back of late-session buying, Mega Financial Holding Co (兆豐金控) rose 0.85 percent to close at NT$23.80 and Fubon Financial Holding Co (富邦金控) gained 0.79 percent to end at NT$51.
“It was no surprise that turnover was reduced today, as many investors still fear foreign institutional investors will pocket more profit before they head back home for the Christmas holiday,” Chu said.
After the market closed, Taiwan Stock Exchange data showed that foreign institutional investors shifted to the buy side with net buying of NT$1.23 billion after net selling of NT$2.46 billion on Thursday.
Elsewhere on Friday, most other Asian markets saw in the Christmas break on a positive note, picking up the baton from Wall Street while the euro stood firm against a sell-off, despite a victory for Catalan separatists in a snap poll.
Global equities rallied over the past year on hopes US President Donald Trump’s key election promise to cut taxes would boost corporate profits and put money in people’s pockets, but traders cashed in their profits soon after the bill was passed this week.
However, buying perked up again on Thursday on bets that the tax reform would further fuel the already healthy US economy, while there was also cheer for news that US lawmakers had agreed a deal to avert a painful government shutdown.
“A day after being nonplussed with the passage of the US tax bill through the [US] House [of Representatives] and [the US] Senate, it seems stock traders decided that yes, after all, they do think the tax cuts will help valuations and the economy,” AxiTrader chief market strategist Greg McKenna said.
The US gains extended into Asia, with Hong Kong on Friday closing up 0.7 percent to 29,578.01, a weekly increase of 2.5 percent from a close of 28,848.11 on Dec. 15.
Tokyo’s Nikkei 225 on Friday closed up 0.2 percent at 22,902.76, rising 1.6 percent from 22,553.22 a week earlier, while Seoul, Wellington and Jakarta were also stronger.
However, Shanghai dipped 0.1 percent to 3,297.06, which was still a weekly gain of 1 percent from a close of 3,266.14 on Dec. 15.
“The US corporate tax cut will lead to better earnings results and have a positive impact on the economy,” Daiwa Securities senior strategist Hideyuki Ishiguro said in Tokyo.
However, Oanda Corp head of Asia-Pacific trading Stephen Innes warned of possible headwinds for next year, saying that that Trump could struggle to push through a planned US$1 trillion infrastructure bill in the face of low poll ratings and possible mid-term election losses.
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