The TAIEX moved sharply higher yesterday, the first trading session after the Lunar New Year holiday, to close at a new high, as the market tried to catch up with the strong gains in US markets during the break.
The bellwether electronics sector was behind the upturn, led by global contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which continued to advance after a nearly 10 percent rise in its American depositary receipts (ADRs) during the holiday, dealers said.
The TAIEX ended 559.89 points, or 3.54 percent, higher at 16,362.29 on turnover of NT$413.177 billion (US$14.56 billion).
Photo: Chen Chih-chu, Taipei Times
Yesterday’s increase was the second-highest single-day rise in the market’s history, trailing only the 590.19 points jump on Nov. 29, 1989.
“Today’s solid gains were no surprise as investors here were encouraged by high-flying tech stocks, especially in the semiconductor industry, during the break,” Concord Securities Co (康和證券) analyst Kerry Huang (黃志祺) said.
Huang was referring specifically to the Philadelphia Semiconductor Index, which rose more than 7 percent during the break in Taiwan.
“In particular, TSMC, whose ADRs soared during the holiday, attracted strong buying at a time when semiconductors have become a critical material in the global economy,” Huang said.
TSMC rose 4.91 percent to close at NT$663. The stock contributed about 264 points to the TAIEX’s gains, and helped the electronics sector and the semiconductor sub-index rise by 4.09 percent and 5.19 percent respectively.
“Other large cap semiconductor stocks also got a boost, sending the electronics sector even higher during the session,” Huang said.
“Judging from the movement of these tech heavyweights, I think foreign institutional investors stood on the buy side,” Huang added.
Foreign institutional investors bought a net NT$29.69 billion of shares yesterday, Taiwan Stock Exchange data showed.
Non-tech stocks also narrowed their gap with their foreign counterparts, especially the petrochemical sector, Huang said.
China Petrochemical Development Corp (中石化) soared 10 percent to close at NT$10.40 and Formosa Plastics Corp (台塑) gained 7.13 percent to end at NT$96.20.
The financial sector posted robust gains as the yield on benchmark 10-year US Treasury notes kept growing, he said.
Fubon Financial Holding Co (富邦金控) rose 4.26 percent to close at NT$48.90 and Cathay Financial Holding Co (國泰金控) gained 3.33 percent to end at NT$41.95.
“Today’s expanded turnover showed that many investors were willing to chase prices,” Huang said. “In addition, the gains helped the TAIEX overcome stiff technical resistance ahead of 16,239 points, the intraday high on Jan. 21, so I expect the uptrend to continue.”
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