Taiwan shares end above 10,900 points

2018/05/14 17:23:14 fontsize-small fontsize-default fontsize-big
Taiwan shares end above 10,900 points

Taipei, May 14 (CNA) Shares in Taiwan continued their upward momentum from the previous session to end above the 10,900 point mark as the bellwether electronics sector continued its uptrend throughout the session, dealers said.

Among the gaining large-cap tech stocks, iPhone assembler Hon Hai Precision Industry Co. led the broader market higher in the wake of the company's capital reduction plan as buying rotated from contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), which ended unchanged, they said.

Despite the gains, market sentiment remained cautious over geopolitical tensions after U.S. President Donald Trump announced last week that Washington would withdraw from a nuclear agreement with Iran, they said.

The weighted index on the Taiwan Stock Exchange or the Taiex closed up 93.41 points, or 0.86 percent, at 10,952.39, after moving between 10,908.86 and 10,970.24, on turnover of NT$143.53 billion (US$4.83 billion).

The market opened up 0.73 percent to breach 10,900 points on follow-through buying from the earlier session as local investors took their cue from a higher Wall Street, where the Dow Jones Industrial Average enjoyed a seven-day winning streak on Friday, dealers said.

The high tech sector continued to serve as a driver to gains on the broader market as buying focused on select "Apple concept stocks", in particular Hon Hai, which is planning to cut its paid-in capital by 20 percent, helping the Taiex sustain its gains for the rest of the session, they said.

"It was a good day for the local equity market, jumping over the technical hurdles ahead of 10,900 points" as the Taiex moved higher for the seventh session in a row, a reflection of a stronger Wall Street," KGI Securities analyst Phil Chu said.

"Rotational buying remained the theme of the main board as Hon Hai and other Apple concept stocks, including smartphone camera lens supplier Largan Precision Co. rose as investors shifted their attention from TSMC for the moment," another Apple supplier, Chu said.

Shares in Hon Hai, second to TSMC in terms of market value, rose 4.71 percent to close at NT$89.00 with 127.97 million shares changing hands on hopes that the capital reduction, which is pending shareholder approval, will boost the company's earnings per share and share price.

Buying spread to other Apple concept stocks with Largan, the most expensive stock in Taiwan, up 3.19 percent to end at NT$4,205.00.

However, TSMC remained sluggish and ended flat at NT$233.00 on relatively low trading volume of 19.90 million shares.

"Judging from the gains posted by these tech heavyweights, I think foreign institutional investors stood on the buy side today," Chu said.

According to the TWSE, foreign institutional investors bought a net NT$8.58 billion worth of shares on the main board Monday after net buying of NT$8.86 billion in the earlier session.

Chu said select old economy stocks were beneficiaries of rising product prices with Taiwan Cement Corp. up 4.61 percent to close at NT$43.15, and Asia Cement Corp. up 2.88 percent to end at NT$33.95.

Shares in Formosa Plastics Corp. gained 2.30 percent to close at NT$111.00 in the wake of higher international crude oil prices after Washington's withdrawal from the 2015 nuclear treaty with oil producing Iran.

"We have to keep alert over developments in the Middle East after the U.S. move," Chu said. "If geopolitical tensions escalate, the global financial markets are expected to feel the pinch."

(By Frances Huang)

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