Equities yesterday underwent a strong technical rebound, as the TAIEX closed above 11,500 points after investors took their cues from gains on Wall Street and in Shanghai.
While concerns lingered over the 2019 novel coronavirus outbreak, the bellwether electronics sector attracted bargain hunting, helping to boost the benchmark index by more than 200 points by the end of the trading session.
The TAIEX closed up 201 points, or 1.77 percent, at 11,555.92. Turnover was NT$159.700 billion (US$5.29 billion) during the session.
“It seemed that the recent sell-off in Taiwan and on global equity markets went too far, so bargain hunters turned active, taking advantage of the hammered stocks,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang (黃國偉) said.
While the TAIEX on Monday plunged 1.22 percent, it managed to stay above the 60-day moving average of about 11,270 points, paving the way for a rebound yesterday, Huang said.
The electronics sector drove the gains throughout the session, led by shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which rose 3.17 percent to close at NT$325 after falling 1.56 percent the previous session.
TSMC shares contributed an about 90 point increase to the TAIEX, while lifting the electronics and the semiconductor sub-indices by 2.31 percent and 2.89 percent respectively.
“Once TSMC’s share price remains above NT$315, it means the stock is technically OK and will be able to rebound at some point, which is good news for the broader market,” Huang said.
Also in the technology sector, shares of integrated circuit designer MediaTek Inc (聯發科) rose 2.23 percent to close at NT$390.5, while those of Largan Precision Co (大立光), a supplier of smartphone camera lenses to Apple Inc, added 2.87 percent to close at NT$4,835.
Among makers of passive electronic components, Yageo Corp (國巨) shares rose 6.76 percent to close at NT$418.5, while Walsin Technology Corp (華新科技) shares gained 9.01 percent to close at NT$236.
Shares of major iPhone assembler Hon Hai Precision Industry Co (鴻海精密) closed unchanged at NT$82.2, off a high of NT$83.9, as international news media reported its production lines in China could remain closed past Monday next week as a result of the coronavirus outbreak.
Apple accounts for about 40 percent of Hon Hai’s sales, according to market estimates.
In the old economy sector, buying was seen of petrochemical shares in particular, which bounced back from heavy losses the previous day, Huang said.
Nan Ya Plastics Corp (南亞塑膠) shares rose 2.34 percent to close at NT$70.1, Formosa Petrochemical Corp (台塑石化) shares added 0.57 percent to close at NT$88 and Formosa Plastics Corp (台塑) shares edged 0.54 percent higher to NT$93.5.
The bargain hunting also extended to the financial services sector, which gained 1.21 percent.
E.Sun Financial Holding Co (玉山金控) shares rose 2.14 percent to close at NT$28.65, Fubon Financial Holding Co (富邦金控) shares added 2.04 percent to close at NT$45.05 and Cathay Financial Holding Co (國泰金控) shares gained 1.24 percent to NT$40.7.
“Despite today’s rebound, the market remained bothered by uncertainty over the spread of the Wuhan coronavirus and many investors are worried about when it will peak,” Huang said.
Despite the rebound, foreign institutional investors registered a net sale of NT$4.05 billion of shares, Taiwan Stock Exchange data showed.
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