Local shares on Friday hit a new high, reaching the highest point in almost 28 years as large-cap electronics stocks, in particular contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and iPhone assembler Hon Hai Precision Industry Co (鴻海精密), made a strong showing, dealers said.
While those two large-cap stocks posted solid gains, many other high-tech stocks, as well as non-high-tech stocks, especially in the petrochemical sector, remained sluggish throughout the session, they said.
The TAIEX on Friday closed up 79.28 points, or 0.72 percent, at the day’s high of 11,150.85, off an early low of 11.095.85, on turnover of NT$133.51 billion (US$4.54 billion). That represented an increase of 2.5 percent from a close of 10,883.96 on Jan. 12.
Friday’s close was the highest level since April 3, 1990, when the TAIEX ended at 11,119.00 points.
The market opened up 0.47 percent as investors ignored a weaker Wall Street, where the Dow Jones Industrial Average closed down 0.37 percent and the S&P 500 ended down 0.16 percent amid lingering worries over a possible US government shutdown, dealers said.
TSMC led the broader market higher on strong buying sparked by a better-than-expected outlook for this year, and interest in Hon Hai accelerated on bargain hunting to help the broader market and offset the weakness of other tech and non-tech stocks, they said.
TSMC and Hon Hai also received a boost in late-session buying to push the weighted index to the day’s high at the close of trading, they added.
“TSMC and Hon Hai, the two largest stocks in terms of market value in Taiwan, dominated today’s trading to lift the broader market to a new high,” Xincheng International Investment Consultant (信誠環球投顧) analyst Chang Chih-cheng (張志誠) said.
Shares in TSMC rose 2.82 percent to close at the day’s high of NT$255.50, with 50.42 million shares changing hands, after the company on Thursday told an investors’ conference that its sales for this year are expected to grow 10 percent to 15 percent from a year earlier in US dollar terms, compared with an earlier market estimate of a 5 percent to 10 percent increase.
Led by TSMC, the bellwether electronics sector gained 1.46 percent and the semiconductor subindex added 1.94 percent.
“Hon Hai benefited from its relatively low valuation, so bargain hunters turned active to pick up the stock. I expect buying in Hon Hai to continue in the short term,” Chang said.
Hon Hai rose 3.30 percent to close at the day’s high of NT$96.90 on trading volume of 101.26 million shares.
However, many other tech stocks moved lower as most funds flocked to TSMC and Hon Hai, Chang said.
Among the falling electronics stocks, memory chipmaker Nanya Technology Corp (南亞科技) fell 1.71 percent to close at NT$80.60, while United Microelectronics Corp (聯電), a smaller rival of TSMC, lost 0.7 percent to end at NT$14.20 and IC designer MediaTek Inc (聯發科) ended down 0.16 percent at NT$319.
In the old economy sector, shares in China Steel Corp (中鋼), the largest steel maker in the nation, fell 0.2 percent to close at NT$25.10, while Formosa Plastics Corp (台灣塑膠) shed 0.99 percent to close at NT$100.50 and Nan Ya Plastics Corp (南亞塑膠) lost 1.38 percent to end at NT$107.50.
“Despite today’s gains, I have turned cautious about the movement of the broader market in the near future,” Chang said. “It is unrealistic to think TSMC and Hon Hai will move higher forever, so if other large-cap stocks fail to follow the two largest ones and post gains, it is possible the weighted index will fall back soon.”
Foreign institutional investors on Friday bought a net NT$8.62 billion of shares on the main board, the Taiwan Stock Exchange said.
Other Asian markets mostly rose after another positive week across trading floors
Hong Kong’s Hang Seng, which has broken to record levels this week, on Friday reversed morning selling to rise 0.4 percent to another record high of 32,254.89, jumping 2.7 percent from 31,412.54 a week earlier.
The Shanghai Composite on Friday climbed 0.4 percent to 3,487.86 one day after data showed that China’s economy grew a forecast-busting 6.9 percent last year, which was much better than the government’s target and the first annual increase since 2010. That was an increase of 1.7 percent from a close of 3,428.94 on Jan. 12.
Tokyo’s Nikkei 225 on Friday ended 0.2 percent higher at 23,808.06, rising 0.7 percent from 23,653.82 a week earlier.
Seoul was 0.2 percent up and Singapore added 0.5 percent. There were also gains in Wellington and Manila. Sydney was down 0.2 percent, while Bangkok, Kuala Lumpur and Jakarta also fell.
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