Local shares on Friday moved higher to close above 10,600 points amid optimism over a possible resolution between the US and China on their trade dispute, which boosted US markets overnight, dealers said.
The bellwether electronics sector led the upturn, particularly in late trading, pushing up the broader market by more than 100 points by the end of the session, the dealers said.
The TAIEX on Friday ended up 104.78 points, or 0.99 percent, at the day’s high of 10,641.04, after moving to a low of 10,525.27 on turnover of NT$120.99 billion (US$3.93 billion). That was the highest close this year, just slightly up from 10,639.07 on March 22.
The market opened up 0.15 percent in a knee-jerk reaction to gains posted on the US markets, where the Dow Jones Industrial Average rose 0.36 percent and the tech-heavy NASDAQ gained 0.34 percent overnight, reflecting an upbeat mood about the trade talks between the US and China, the dealers said.
In the early morning session, the TAIEX moved in a narrow range before buying accelerated after 9:30am to boost large-cap stocks in the tech sector, as well as the financial sector, pushing up the local main board past the technical hurdle of 10,600 points by the end of the session, they said.
“The global trade issue dictated market sentiment,” Hua Nan Securities Co (華南永昌證券) analyst Kevin Su (蘇俊宏) said. “As the talks proceed, many investors prefer to hold an upbeat attitude for the moment, hoping that an agreement will be reached soon.”
“This mentality was also seen in other regional markets today, so investors here became more willing to buy, and the buying reached the peak in just the last few minutes of the session,” Su said.
Tech heavyweights, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, benefited from the late trading session, he said.
TSMC rose 1.45 percent to close at the day’s high of NT$245.50, with 28.2 million shares changing hands.
Led by TSMC, the electronics sector rose 1.05 percent and the semiconductor subindex gained 1.37 percent.
Also benefiting from late-session buying, iPhone assembler Hon Hai Precision Industry Co (鴻海) rose 2.37 percent to end at the day’s high of NT$73.50 and integrated circuit designer MediaTek Inc (聯發科) added 2.17 percent to close at the day’s high of NT$282.50.
However, bucking the upturn on the broader market was Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, which fell 0.76 percent to end at NT$4,600 as investors locked in gains.
“Buying also spread to the financial sector, which had lagged behind the broader market, as well as select old economy stocks, helping the TAIEX to hit the day’s high,” Su said.
In the financial sector, which rose 1.2 percent, Cathay Financial Holding Co (國泰金控) rose 2.16 percent to close at NT$44.95 and Fubon Financial Holding Co (富邦金控) gained 2 percent to end at NT$46.
Among the old economy stocks that gained, Formosa Petrochemical Corp (台塑石化) added 1.76 percent to close at NT$115.50, Formosa Chemicals & Fibre Corp (台灣化纖) rose 2.28 percent to end at NT$112 and China Steel Corp (中鋼), the largest steelmaker in Taiwan, gained 1.2 percent to close at NT$25.30.
“Today’s gains were largely driven by ample liquidity on foreign inflows into Taiwan after the US Federal Reserve hinted earlier this month that it will not raise interest rates for the rest of the year,” Su said.
Foreign institutional investors on Friday bought a net NT$6.58 billion of shares on the main board, Taiwan Stock Exchange data showed.
Elsewhere in Asia on Friday, markets rose, putting them on course to end the week on a positive note with investors looking past a downgrade of US growth to focus on the next round of top-level China-US trade talks.
While the previous five days had been dogged by fears over the outlook for the global economy, equities from Sydney to Wall Street have enjoyed a stellar start to this year, fueled mostly by hopes of a tariffs deal and the prospect of lower borrowing costs.
A slight pickup in the key US 10-year Treasury yield provided some sense of stability, although dealers remained on edge over the future, with data showing that the US economy grew at a much slower pace than initially thought from October to December last year.
Attention is on Beijing, where top Chinese and US negotiators were wrapping up the latest batch of talks aimed at ending their long-running trade row that has dragged on the world economy.
US National Economic Council Director Larry Kudlow said that the negotiations were not “time-dependent” and could be extended, adding that they could take weeks or months to get a final deal.
US Secretary of the Treasury Steven Mnuchin on Friday afternoon wrote on Twitter that he had “concluded constructive trade talks in Beijing.”
The talks are to continue in Washington next week.
Observers have remained upbeat on the negotiations, with China having made a number of concessions on key issues, including intellectual property, while US President Donald Trump has often said that he is confident about a deal.
“Sentiment was largely positive after reports that the trade negotiations between the US and China were improving,” CMC Markets UK analyst David Madden said.
The Shanghai Composite on Friday surged 95.81 points, or 3.2 percent, to 3,090.76, but slid 0.4 percent from a close of 3,104.15 on March 22.
Tokyo’s Nikkei 225 on Friday gained 172.5 points, or 0.8 percent, to 21,205.81, plunging 1.9 percent from 21,627.34 a week earlier.
Hong Kong’s Hang Seng on Friday closed up 276.15 points, or 1 percent, at 29,051.36, a 0.2 percent decrease from a close of 29,113.36 on March 22.
Seoul’s KOSPI on Friday rose 12.57 points, or 0.6 percent, to 2,140.67, but dropped 2.1 percent from 2,186.95 a week earlier.
Singapore also added 0.6 percent, while Sydney put on 0.1 percent and Wellington gained 0.8 percent.
“Risk assets are being supported right now, in my view, by a dovish Fed, a China stabilization and better sentiment around geopolitical risks,” Manulife Asset Management’s Frances Donald told Bloomberg News. “That probably gives this rally a little bit more juice.”
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