The TAIEX yesterday rose 0.24 percent to 12,118.71 points to close out the Year of the Pig with a 22 percent gain.
On the last trading day of the old lunar year, global investors sought to take advantage of Taiwanese tech firms involved in the 5G as well as a recovery in the technology product cycle.
The showing reversed a decline of 4.69 percent in the Year of the Dog, and the local bourse could see further momentum after it reopens on Jan. 30, analysts said.
“In the absence of major external shocks, the local bourse might climb higher after the Lunar New Year holidays, led by the improving outlook for heavyweight tech firms,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
Turnover on the Taiwan Stock Exchange yesterday tapered off to NT$113.32 billion (US$3.78 billion), as a significant number of investors stayed on the sidelines for fear of downside surprises from abroad, Huang said.
Huang said he did not see any threats on the horizon.
Foreign institutional investors and proprietary dealers increased holdings by net NT$5.14 billion and NT$884.03 million respectively, while mutual funds slashed positions by net NT$224.87 million, Taiwan Stock Exchange data showed.
Electronics stocks moved higher early on before some investors started moving to the sell side, but buying rotated to financial stocks to keep the TAIEX above 12,100 points.
Taiwan Semiconductor Manufacturing Co (台積電) closed unchanged at NT$333 after hitting a high of NT$335.5.
Other tech heavyweights that saw their gains capped included iPhone assembler Hon Hai Precision Industry Co (鴻海精密), which ended unchanged at NT$92.3, off a high of NT$93.4; and Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, which fell 0.2 percent to end at NT$4,975 after hitting a high of NT$5,015.
DRAM chipmaker Nanya Technology Co (南亞科技) rose 1.19 percent to end at NT$85.2.
Taiwan is home to contract electronics makers for Apple, Tesla Inc, Advanced Micro Devices Inc and Intel Corp, which are due to release their earnings results for last year while the local market is closed for the long holiday, analysts said.
CTBC Investments Co (中信投信) said it is looking at encouraging figures and guidance now that the US and China have sealed a partial trade deal and plan more talks to iron out remaining differences.
CTBC Investments said it expects corporate profits among local firms to grow 7.4 percent this year, but electronics firms might outperform with a 13.4 percent pickup.
The launch of 5G devices would be a catalyst for companies in the supply chain, while others would continue to reap the windfall from trade rerouting, CTBC Investments said.
Trade tensions have prompted Chinese technology firms to cut dependence on US suppliers and shift orders to local vendors instead, it said.
Companies providing components for iPhones series should perform well this year, as Apple is to roll out more affordable versions in the first half of the year and high-end models, including 5G gadgets, in the second half, CTBC Investments added.
Additional reporting by CNA
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