Local shares on Friday surged more than 150 points, with investors encouraged by a strong showing on US markets overnight amid reduced concerns over trade frictions between the US and China after Beijing indicated that it would not retaliate for the moment over the latest round of tariffs from Washington, dealers said.
Improved sentiment prompted local investors to chase prices throughout the session, boosting turnover and pushing the local main board to close at above 10,600 points, they said.
The bellwether electronics sector led the upturn on the back of solid buying in “Apple concept” stocks on expectations that the US consumer electronics giant will unveil its next generation of iPhones on Sept. 10, dealers said.
The TAIEX on Friday ended up 155.62 points, or 1.49 percent, at 10,618.05, a gain of 0.8 percent from 10,538.11 a week earlier, after moving between 10,504.28 and 10,618.05, on turnover of NT$147.13 billion (US$4.68 billion).
The market opened up 0.4 percent in a reaction to gains on the US markets, where the Dow Jones Industrial Average closed up 1.25 percent and the S&P 500 ended up 1.27 percent after Chinese Ministry of Commerce spokesman Gao Feng (高峰) on Thursday said that Beijing is willing to remain calm to resolve the trade disputes with Washington and is against any escalation of bilateral tensions, dealers said.
Buying on the local main board accelerated toward the end of the session, with large-cap tech stocks, in particular in the Apple Inc supply chain, in focus, helping the weighted index overcome stiff technical resistance ahead of the 20-day moving average of 10,456 points and move even higher as old economy and financial stocks joined the upturn, they said.
“China’s attitude toward the trade disputes with the US is encouraging, in particular after US President Donald Trump threatened last week to raise duties on US$250 billion of Chinese goods from 25 percent to 30 percent and hike tariffs on an additional US$300 billion of products from 10 percent to 15 percent,” Hua Nan Securities Investment Management Co (華南投顧) analyst Kevin Su (蘇俊宏) said.
“It was no surprise that local investors rushed to hunt bargains soon after the local equity market opened today,” Su said. “It seems that market sentiment improved a lot as turnover expanded to top NT$140 billion, with more and more investors willing to trade.”
The electronics sector, which closed up 1.63 percent at the day’s high of 443.10 points, led the broader market to steam ahead as investors have high hopes that the new iPhones will boost Taiwanese suppliers’ shipments in the fourth quarter of this year, Su said.
Apple announced overnight that it would hold an event on Sept. 10. Although the US firm offered no further details, the market widely anticipates that three new iPhones will be unveiled.
Among the gaining Apple concept stocks, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the local market, rose 1.97 percent to end at the day’s high of NT$259, with 35.15 million shares changing hands.
The gains posted by TSMC contributed about 50 points to the TAIEX and boosted the semiconductor subindex by 1.75 percent.
Also in the Apple supply chain, iPhone assembler Hon Hai Precision Industry Co (鴻海精密) added 3.2 percent to close at NT$74.20 and smartphone camera lens maker Largan Precision Co (大立光) rose 1.17 percent to end at NT$3,890.
In addition, shares in Pegatron Corp (和碩), a smaller assembler of iPhones, soared 4.38 percent to close at NT$52.40.
Strong interest in tech stocks spread to old economy and financial stocks, giving an additional boost to the TAIEX, Su said.
In the old economy, the petrochemical sector dominated the session, with the four major entities under Formosa Plastics Group (台塑集團) leading the upturn, Su said.
Formosa Plastics Corp (台灣塑膠) rose 2.95 percent to close at NT$94.10, Formosa Chemicals & Fibre Corp (台灣化纖) added 2.56 percent to end at NT$88.10, Formosa Petrochemical Corp (台塑石化) gained 2.42 percent to close at NT$97.20 and Nan Ya Plastics Corp (南亞塑膠) rose 1.78 percent to end at NT$68.80.
In the financial sector, which closed up 1.38 percent, Cathay Financial Holding Co (國泰金控) gained 1.65 percent to end at NT$40.15 and Fubon Financial Holding Co (富邦金控) added 1.16 percent to close at NT$43.65.
“After the TAIEX breached 10,600 points at the end of the session, the main board has turned technically healthier, paving the way for further gains down the road,” Su said.
“However, despite the latest encouraging remarks by Beijing on the trade war, before any agreement is reached, the issue is expected to create uncertainty that affects global financial markets, including Taipei,” Su added.
Foreign institutional investors on Friday bought a net NT$15.31 billion of shares on the main board, Taiwan Stock Exchange data showed.
Elsewhere in Asia on Friday, the renewed hopes for trade talks boosted most Asian equities, setting up a positive end to a volatile week.
However, the arrest of activists in Hong Kong fueled fresh worries about violent protests in the territory and wiped out an early rally.
With huge levies on goods worth hundreds of billions of US dollars due to go into effect over the weekend, the long-running trade war between the world’s top two economies steps up a gear and observers are fretting the row could drag on.
However, Beijing on Thursday appeared to want to dial down the tensions.
“The escalation of the trade war is not beneficial to China, and it is not beneficial to the United States,” Gao said.
Later, Trump said that talks between the two were planned for later on Thursday, although there was no indication any had taken place by late Asian trade.
The news came as a big relief for markets, which have been hit by volatility over the standoff after both sides last week unveiled fresh tariffs, with Trump slamming Beijing, but days later saying that they had held telephone talks and that negotiations would resume soon.
“The more measured tone in deciding to focus on next month’s meeting to discuss removing the extra duties has seen some optimism start to creep back in,” CMC Markets UK chief market analyst Michael Hewson said.
Seoul’s KOSPI on Friday surged 34.38 points, or 1.8 percent, to 1,967.79, gaining 1 percent from 1,948.3 a week earlier.
Tokyo’s Nikkei 225 on Friday rose 243.44 points, or 1.2 percent, to 20,704.37, mostly flat from a close of 20,710.91 on Aug. 23.
Sydney, Manila, Bangkok and Jakarta also posted healthy gains.
However, after starting the day more than 1 percent higher, Hong Kong’s Hang Seng on Friday edged up only 21.23 points, or 0.1 percent, to 25,724.73, a drop of 1.7 percent from 26,179.33 on Aug. 23, as investors fret over the reaction to the arrest of leading democracy campaigners.
“Now people really fear emergency law could be implemented in Hong Kong,” Amber Hill Capital Ltd (安山資本) asset management director Jackson Wong (黃志陽) said.
“Property stocks are sold most, because if Hong Kong is not different from other Chinese cities, it’s hard to retain talent, and property prices won’t find support,” Wong said.
Shanghai was also hit, with the Shanghai Composite on Friday sliding 4.68 points, or 0.2 percent, to 2,886.24, shedding 0.4 percent from 2,897.43 a week earlier.
Dealers brushed off data showing that the US economy grew at a slower pace than initially thought in the second quarter. Those figures were soothed by consumer spending remaining strong.
Oanda Corp senior market analyst Jeffrey Halley said that while the 0.1 percentage point downward revision to the growth figure was small, “without the Chinese comments, investors would probably have continued streaming for the exit door.”
“All in all, it emphasizes once again that the US-China trade dispute ... remains the only game in town for investors globally, with data a secondary player,” he added.
Just a few years ago, the millennial generation — generally defined as those born from the early 1980s through the mid-1990s — was synonymous with youthful rebellion. However, now, as the millennials ease into early middle age, they are finding their path out of their parents’ basement to be a lot harder than it was for earlier generations. The fundamental problem is that millennials are not building wealth. The wealth of the median US household headed by someone 35 or younger has actually shrunk in inflation-adjusted terms since the mid-2000s, even as the wealth of older Americans has continued to grow. An
‘LITTLE CHOICE’: The airline said it expected only about 8,000 of its 29,000 employees to be working by next month, but hoped to have 21,000 in the next two years Qantas Airways Ltd plans to cut at least 6,000 jobs and keep 15,000 more workers on extended furloughs as Australia’s largest airline tries to survive the coronavirus pandemic. Qantas yesterday announced a plan to reduce costs by billions of dollars and raise fresh capital. The plan includes grounding 100 planes for a year or more and immediately retiring its six remaining Boeing Co 747 planes. Chief executive Alan Joyce said the airline has to become smaller as it braces for several years of much lower revenues. He said the furloughed workers faced a long interruption to their airline careers. “The actions that we’re taking
Apple Inc’s decision to stop using Intel Corp processors in its Mac computers and switching to its own chips might benefit Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and boost Taiwan’s high-tech exports, Australia and New Zealand Banking Group (ANZ) said in a note on Tuesday. The US tech giant announced the “Apple silicon” initiative at its annual Worldwide Developers’ Conference, which started on Monday. The company said the first Mac powered by its own chips would debut by the end of this year and all product lines might shift to the new architecture in the next two years. TSMC is likely to
EXPERIMENTAL DRUG: While news about a COVID-19 vaccine is more eye-catching, developing a treatment would be more viable, the Senhwa boss said Senhwa Biosciences Inc (生華科) aims to raise NT$1.5 billion (US$50.57 million) by issuing 15 million new common shares in the third quarter of this year to fund the research of new drugs, including the experimental drug Silmitasertib for the treatment of COVID-19, the company said on Monday. That would be the firm’s largest fundraising effort after it raised more than NT$1.4 billion from an initial public offering on the Taipei Exchange (TPEX) in April 2017, chief financial officer Sarah Chang (張小萍) told the Taipei Times by telephone. The price of the new shares would depend on the firm’s average share price