The TAIEX yesterday moved higher for the fourth consecutive session as the financial sector was boosted by hopes that the US Federal Reserve would initiate a rate-hike cycle this year, which would push up financial institutions’ returns from overseas investments, dealers said.
Contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) rose slightly higher ahead of an investors’ conference after the market closed for the day, while rotational buying of other select semiconductor stocks supported the broader market.
The TAIEX closed up 61.53 points, or 0.33 percent, at 18,436.93. Without the financial sector, the main board rose only 13.13 points, or 0.08 percent, from a session earlier.
Turnover totaled NT$277.367 billion (US$10.03 billion), with foreign institutional investors buying a net NT$17.45 billion of shares on the main board, Taiwan Stock Exchange data showed.
“Foreign institutional investors had started to rebuild their holdings in financial heavyweights in the past few sessions,” Hua Nan Securities Co (華南永昌證券) analyst Lu Chin-wei said. “The rate increase leads simply gave investors a good reason to buy, taking advantage of the relatively low valuations of these large financial stocks.”
CTBC Financial Holding Co (中信金控) rose 3.83 percent to close at NT$28.45.
On Wednesday, foreign institutional investors registered a net buy of 20.38 million CTBC shares, the largest among the companies listed on the exchange.
In addition, Cathay Financial Holding Co (國泰金控) rose 4.17 percent to close at NT$67.4, Mega Financial Holding Co (兆豐金控) gained 2.3 percent to close at NT$37.85 and Fubon Financial Holding Co (富邦金控) added 2 percent to close at NT$81.6.
The tech sector fell into consolidation mode, up only 0.09 percent, with the semiconductor subindex unchanged.
“TSMC moved in a narrow range today after a rally in the previous three sessions, but its initial losses were technical, as the chipmaker is riding the waves of strong global demand and its fundamentals are healthy,” Lu said.
TSMC rose 0.15 percent to close at NT$661 after coming off a low of NT$655 after foreign institutional investors bought a net 15.12 million shares on Wednesday, the second-largest net buy.
As TSMC took a pause, buying rotated to other semiconductor heavyweights, with United Microelectronics Corp (聯電), a smaller contract chipmaker, up 2.26 percent to close at NT$63.3, and smartphone chip designer MediaTek Inc (聯發科) up 1.38 percent to close at NT$1,100.
However, IC packaging and testing services provider ASE Technology Holding Co (日月光投控) lost 1.87 percent to close at NT$105.50.
Rotational buying also pushed up select raw material stocks, dealers said.
The steel sector rose 1.87 percent, with China Steel Corp (中鋼), the largest steelmaker in Taiwan, up 1.87 percent to close at NT$35.5, and China Steel Structure Corp (中鋼構) up 6.76 percent to close at NT$63.2.
Bucking the upturn, Evergreen Marine Corp (長榮海運) fell 1.95 percent to close at NT$126, while rivals Yang Ming Marine Transport Corp (陽明海運) and Wan Hai Lines Ltd (萬海航運) lost 2.78 percent and 4.26 percent to close at NT$105 and NT$168.5 respectively.
“An earnings season at home and the US markets are under way, so it is worth watching, as the results and forecasts of the major listed firms are expected to move share prices,” Lu said. “For the TAIEX, strong technical support is expected in the event of any volatility at around 18,000 points, the 20-day moving average.”
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