The TAIEX yesterday rallied 1.68 percent to close at 22,042.69, boosted by the US Federal Reserve’s cuts to its key interest rates for the first time in four years, dealers said.
Turnover totaled NT$327.71 billion (US$10.26 billion).
Amid hopes of increasing liquidity, investors in Taiwan rushed to pick up large-cap stocks across the board, led by the bellwether electronics sector, after an initially weak start, dealers added.
Photo: CNA
After wrapping up a two-day policymaking meeting, the Fed lowered its key interest rates by 50 basis points — the higher end of the market’s estimate — to a range between 4.75 percent and 5 percent.
“Uncertainties over the Fed policy have been removed,” Moore Securities Investment Consulting analyst Adam Lin said.
“More importantly, the Fed emphasized that the US economy remains solid, despite the outsized rate cut,” Lin said.
“In addition to the positive signs on the regional markets, US stock futures moving higher points to a higher opening in the spot markets later in the day,” he said.
“So, investors looked to pick up bargains following earlier losses on hopes that the Fed relaxing its monetary policy would lead to more market liquidity and higher share prices,” he added.
The electronics index rose 1.86 percent with the semiconductor sub-index up 1.9 percent after contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) gained 2.02 percent to close at the day’s high of NT$960.00. TSMC’s gains contributed about 155 points to the TAIEX’s rise.
Buying also spread to other semiconductor stocks, with smartphone chip designer MediaTek Inc (聯發科) rising 1.36 percent to close at NT$1,120.
In addition, highly priced IC stocks in particular attracted stronger interest, including application-specific IC Alchip Technologies Ltd (世芯), which rose 4.65 percent to end at NT$2,365.00.
Bucking the upturn, United Microelectronics Corp (聯電), a smaller contract chipmaker, lost 0.19 percent to close at NT $53.70, and IC packaging and testing services provider ASE Technology Holding Co (日月光投控) dropped 0.33 percent to end at NT$152.00.
Continued optimism in artificial intelligence (AI) development pushed up AI-related stocks, dealers said.
Second to TSMC in terms of market value, iPhone assembler Hon Hai Precision Industry Co (鴻海精密), which also produces AI servers, gained 1.44 percent to close at NT$176.50, and Quanta Computer Inc (廣達), another major AI server supplier, rose 1.20 percent to end at NT$253.
“Non-tech stocks also rode the waves of rising liquidity to push up the TAIEX further by the end of the session,” Lin said.
The petrochemical index rose 1.31 percent on its low valuation with Nan Ya Plastics Corp (南亞塑膠) rising 1.9 percent to close at NT$42.95, Formosa Chemicals & Fibre Corp (台灣化學纖維) gaining 0.86 percent to end at NT$41.00, and Formosa Plastics Corp (台灣塑膠) climbing 0.62 percent to close at NT$48.55. However, Formosa Petrochemical Corp (台塑石化) ended down 0.19 percent at NT$51.40.
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