Taiwan shares above 8,400 for first time since 2011
CNATAIPEI -- Shares in Taiwan closed above the 8,400-point mark Friday as the bellwether electronics sector posted gains, led by Taiwan Semiconductor Manufacturing Co. (TSMC), dealers said.
October 19, 2013, 12:42 am TWN
Touch panel suppliers, such as TPK Holding Co., also attracted bargain hunters to take advantage of their low valuations after a recent sell-off caused by concerns over a supply glut, they said.
The financial sector's sub-index closed lower, however, after Taiwan and China failed to reach a consensus in a meeting held Thursday on making it easier for Taiwanese insurance companies to gain entry into the mainland market, they said.
The weighted index closed up 66.51 points, or 0.79 percent, at the day's high of 8,441.19, off an early low of 8,390.32, on turnover of NT$84.05 billion (US$2.86 billion). The index's closing level was the highest since Aug. 3, 2011.
“After today's gains, the local equity market has turned technically healthier. It could trend higher before it encounters the nearest resistance at around 8,500 points,” said Hua Nan Securities analyst Kevin Su.
The market opened 0.50 percent higher as TSMC led gains in the semiconductor sector. The positive momentum remained steady throughout the session, helping the index overcome strong technical resistance ahead of 8,400 points, dealers said.
“Since the U.S. Congress passed legislation to raise the country's debt ceiling Wednesday, market sentiment has improved, helping the local index extend its gains from yesterday,” Su said.
Market Sentiment Improved on TSMC's Upbeat Outlook
“Judging from the expanded turnover, it seemed that a growing number of investors were more willing to chase prices.”
Su said that TSMC's upbeat assessment of the sales contribution of its advanced 20 nanometer process in 2014 served as a catalyst to the buying in the high-tech sector as well as in the broader market. The electronics sub-index ended up 1.34 percent.
TSMC rose 2.80 percent to close at NT$110.00 after the world's largest contract chip maker said Thursday at an investor conference that it will maintain its technology lead over its peers, with chips using the 20mn process expected to account for 10 percent of its sales in 2014.
“TSMC is always a good pick as the company has strong fundamentals,” Su said, referring to its record highs in net profit and consolidated sales for the third quarter due to its global competitiveness.
Among other semiconductor stocks that posted gains, contract chip maker United Microelectronics Corp. added 2.37 percent to end at NT$12.95, while memory chip supplier Inotera Memories Inc. ended up 2.47 percent at NT$18.65.
In the touch panel sector, TPK and Wintek Corp. both rose by the daily maximum of 7 percent to close at NT$249.00 and NT$11.15, respectively.
“But I wouldn't advise investors to buy touch panel stocks, as these manufacturers still face stiff price competition. Today's gains were just technical in nature,” Su said.
In the financial sector, which closed down 0.19 percent, Fubon Financial Holding Co. fell 1.62 percent to close at NT$42.60, and CTBC Financial Holding Co. shed 1.01 percent to end at NT$19.70.