Taiwan shares end above 10,600 points; TSMC market cap hits high

2017/10/11 16:47:59
Taiwan shares end above 10,600 points; TSMC market cap hits high

Taipei, Oct. 11 (CNA) Shares in Taiwan moved sharply higher Wednesday, closing above the 10,600-point mark to hit another 27-year high, on a rally by the bellwether electronics sector after American markets had a strong showing overnight, dealers said.

Contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), the most heavily weighted stock in the local market, steamed ahead to push up the broader market as the stock's market capitalization hit a record high, they said.

The weighted index on the Taiwan Stock Exchange closed up 108.38 points, or 1.03 percent, at 10,641.19, after moving between 10,576.12 and 10,668.49, on turnover of NT$150.88 billion (US$4.98 billion).

The market opened up 0.41 percent in reaction to the Dow Jones Industrial Average's record high seen in the U.S. on Tuesday.

Buying then accelerated, with a focus on the high-tech sector and semiconductor stocks, in particular TSMC, in response to the solid gains posted by U.S. IC stocks, dealers said.

Buying also spread to the non-high-tech sector as investors snapped up petrochemical and food stocks, sending the broader market even higher to boost the weighted index to its highest level since April 4, 1990, when the index ended at 10,907.09, they said.

"Judging from the buying in market heavyweights such as TSMC, I think foreign institutional investors were behind the upturn after they returned from the four-day Oct. 10 National Day holiday," Mega International Investment Services Corp. analyst Alex Huang said.

"Foreign institutional investors generally remained upbeat about the movement of the Taiex, and buying in stocks like TSMC maintained the strength of the main board," Huang said.

According to the TWSE, foreign institutional investors bought a net NT$9.53 billion in shares on the market Wednesday.

TSMC, the world's largest contract chipmaker, rose 3.79 percent to close at NT$233.00, with 63.58 million shares changing hands, after the Philadelphia Semiconductor Index closed up 0.61 percent to a 17-year high overnight, led by stocks such as memory chip maker Micron Technology Corp.

Due to the solid gains, TSMC's market cap hit a new high of NT$6.04 trillion, which was also the highest of any stock listed in Taiwan.

Among other IC stocks, TSMC's smaller rival United Microelectronics Corp. (聯電) rose 1.61 percent to close at NT$15.80, and IC designer MediaTek Inc. (聯發科) gained 5.15 percent to end at NT$306.00.

Huang said interest in petrochemical shares showed optimism toward the sector after major players such as Formosa Plastics Corp. (台塑) reported higher profits for the third quarter.

Formosa Plastics gained 2.61 percent to close at NT$94.40, and affiliate Nan Ya Plastics Corp. (南亞) rose 1.91 percent to end at NT$74.80. Also in the non-high-tech sector, food brand Uni-President Enterprises Corp. (統一) added 1.89 percent to close at NT$64.80.

"With the weighted index breaching the 10,600-point mark, I expect the room for a further upswing will be limited as stiff technical resistance ahead of 10,700 points remains in place," Huang said.

"Today's strong buying by foreign institutional investors is unlikely to be repeated any time soon, so the broader market is expected to soon fall into consolidation mode," Huang said.

(By Frances Huang)
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