Taiwan shares soar as TSMC stages strong rebound

2018/08/08 12:09:02 fontsize-small fontsize-default fontsize-big
Taiwan shares soar as TSMC stages strong rebound

Taipei, Aug. 8 (CNA) Taiwan shares were up more than 100 points at one point Wednesday morning as contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) bounced back from losses over the past two sessions caused by a virus attack, dealers said.

"TSMC came under pressure from foreign institutional investors after the virus incident (surfaced on late Aug. 3)," Ta Ching Securities analyst Jerry Chen said.

"It staged a strong technical rebound today as the impact of the virus incident has faded, giving a boost to the entire market."

As of 11:44 a.m., the weighted index on the Taiwan Stock Exchange (TWSE), the Taiex, had gained 99.38 points or 0.90 percent to 11,082.82 after hitting 11,095.50, on turnover of NT$88.13 billion (US$2.88 billion).

TSMC, the most heavily weighted stock in the market, had risen 2.28 percent to NT$247.00 with 14.72 million shares changing hands, rebounding from a decline of 2.23 percent in the previous two trading sessions.

TSMC's American depositary receipts (ADRs) ended up 0.41 percent on the U.S. market Tuesday following a 1.49 percent drop on Monday.

According to Chen, foreign institutional investors sold a net 10.1 million TSMC shares in the previous trading session.

TSMC said on Monday that the virus attack could cut its sales for the third quarter by less than 2 percent, lower than the 3 percent drop originally projected by the company in the hours after the virus was detected.

At an investor conference in July, TSMC said its consolidated sales would range between US$8.45 billion and US$8.55 billion in the third quarter, with an expected median of US$8.5 billion, about 8 percent higher than the US$7.85 billion it posted in the second quarter.

"We have to watch whether foreign institutional investors have shifted to the buy side today. Otherwise, I suspect the current buying in TSMC came from government-led funds, which wanted to boost the broader market," Chen said.

The Ministry of Finance said Tuesday that TSMC's sales drop in the third quarter could drag down Taiwan's exports for the three-month period by 0.2 percentage points.

Led by TSMC, the bellwether electronics sector had gained 0.99 percent as of 11:44 a.m.

Among other gaining high-tech stocks, Largan Precision Co., a supplier of smartphone camera lenses to Apple Inc. had risen 0.80 percent to NT$5,055.00, and iPhone assembler Hon Hai Precision Industry Co. had added 0.71 percent to NT$85.00.

Buying also spread to select financial stocks to push up the broader market higher, Chen said.

In the financial sector, Yuanta Financial Holding Co. had gained 3.44 percent to NT$15.05 and E. Sun Financial Holding Co. had risen 1.15 percent to NT$21.90 as of 11:44 a.m.

"After the strong showing, the Taiex is expected to face strong technical resistance ahead of 11,100 points," Chen said. "Amid rising trade tensions between the United States and China, investors beware of a possible pullback."

(By Tien Yu-pin and Frances Huang)

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