Local market closes higher after TSMC upgrades sales guidance
CNA March 14, 2014, 12:09 am TWN
TAIPEI--Shares in Taiwan ended higher Thursday, with Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, leading the gains after the chip maker upgraded its sales guidance, dealers said.
On the back of the strong showing made by the bellwether electronics sector, the index stood well above the 8,700-point mark at the close, while old-economy stocks ended mixed amid worries over China's economic climate, the dealers said.
The weighted index on the Taiwan Stock Exchange closed up 63.06 points, or 0.72 percent, at 8,747.79, after moving between 8,732.15 and 8,768.66, on turnover of NT$112.94 billion (US$3.73 billion).
The market opened up 0.72 percent as the electronics sector staged a rebound in the wake of gains posted by the tech-heavy NASDAQ index overnight, the dealers said.
Buying among heavyweights, in particular TSMC, continued to push the index higher, but some profit-taking followed to cap the uptrend, with the index moving closer to the next technical hurdles at around 8,800 points, they said.
"Thanks to TSMC's strong showing, today's turnover expanded, paving the way for today's upside," Concord Securities analyst Kerry Huang said. "But looking forward, it will take some time to digest downward pressure before the market closes above 8,800 points."
TSMC's gains pushed up the semiconductor sector, as well as the electronics sector in general. According to Huang, the electronics sector, which closed up 1.44 percent, accounted for about 65 percent of the total trading volume.
Market Remains Upbeat About TSMC's Earnings Prospect
After announcing an upgrade of its first-quarter sales forecast to NT$147 billion from an earlier estimate of NT$136 billion-NT$138 billion, TSMC rose 3.10 percent to close at NT$116.50, off an early high of NT$117.50.
"Although TSMC failed to close at the day's high on some profit-taking, many investors remain upbeat about the chip maker's earnings prospects," Huang said. Barclays Capital has raised its forecast for TSMC's first-quarter earnings per share to NT$1.71 from NT$1.51.
Buying also spread to other high-tech stocks. Among them, Hon Hai Precision Industry Co. (鴻海精密), which assembles iPhones and iPads for Apple Inc., gained 1.65 percent to end at NT$86.10.
Siliconware Precision Industries Co. (矽品精密), one of Taiwan's leading integrated circuit designers, added 4.89 percent to close at NT$41.85 amid optimism that the company will ride the wave of solid demand for lower-cost smartphones.
"As the electronics sector was spotlighted today, trading in old-economy stocks appeared quiet. Investors preferred to wait for more economic data from China before taking action," Huang said.
Among the China concept stocks in the old-economy sector — stocks that have close ties with Beijing — Taiwan Cement Corp. (台灣水泥) fell 0.32 percent to end at NT$47.10, and textile maker Far Eastern New Century Corp. (遠東新世紀) lost 0.96 percent to close at NT$31.00, while Formosa Plastics Corp. (台塑集團) ended unchanged at NT$75.00.
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