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.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts