Local market ends over 9,300 points after Wall Street gains
August 23, 2014, 12:01 am TWN
TAIPEI -- Shares in Taiwan closed above the 9,300 point mark Friday for the first time since Aug. 4 after recent consolidation, as investors took cues from gains posted on Wall Street overnight to hunt bargains, dealers said.
The weighted index on the Taiwan Stock Exchange ended up 126.72 points, or 1.36 percent, at 9,380.10, after fluctuating between 9,271.87 and 9,380.60 on turnover of NT$100.70 billion (US$3.36 billion).
Turnover In Focus
"Investors have to keep a close eye on whether turnover will expand significantly, as higher trading volume indicates more buying interest, which could push the index higher in the future," Taishin Securities Investment Advisory analyst Tony Huang said.
"After the index stood above 9,300 points at the close today, the local market has turned technically healthier, paving the way for further gains down the road," Huang said.
Buying was seen across the board, with the bellwether electronics sector staging a strong technical rebound, while the financial sector continued to move higher, lending more support to the broader market, the dealers said.
Old economy stocks, particularly China concept stocks, which have close business ties with China, also attracted buying as investors shrugged off China's worse-than-expected manufacturing activity data for August, they added.
The market opened up 0.21 percent in a knee-jerk reaction to a record high posted by the S&P 500 index in the U.S. market overnight, and momentum continued, with blue chips in both the high-tech and non-high-tech sectors rising to push up the index above 9,300 points and maintain the strength until the end of the session, the dealers said.
Huang said that in addition to large-cap stocks, many small- and mid-cap stocks bounced back, indicating that market sentiment improved, prompting investors to chase prices throughout the session.
The electronics sub-index closed up 1.16 percent and the financial sub-index ended up 1.54 percent, serving as a driver to the upturn in the broader market, the dealers said.
PC Spurs Hi-tech Upturn
"Downstream electronics stocks, in particular personal computer makers, led the high-tech sector higher after shares of U.S. PC giant Hewlett-Packard (HP) rose sharply on Wall Street overnight," Huang said. HP shares rose 5.4 percent on the back of a surprise increase in its quarterly earnings.
Among the gaining local PC stocks, Asustek Computer Inc. (華碩電腦) rose 2.36 percent to close at NT$303.00 and Quanta Computer Inc. (廣達電腦) gained 2.93 percent to end at NT$84.40.
Taiwan Semiconductor Manufacturing Co. (TSMC,台灣積體電路), the most heavily weighted stock in the local market, which is believed to supply processors for Apple Inc.'s new iPhone, added 0.80 percent to close at NT$125.50 and Hon Hai Precision Industry Co., which assembles iPhones and iPads for Apple, rose 1.38 percent to end at NT$110.00.
"I expect these local suppliers to Apple will gain further, in particular in September, when the U.S. firm unveils new products," Huang said.
In the financial sector, Mega Financial Holding Co. (兆豐金控) added 2.15 percent to close at NT$26.10 and Cathay Financial Holding Co. (國泰金控) rose 1.96 percent to NT$51.90. Fubon Financial Holding Co. rose 1.03 percent to close at NT$49.00 off an early high of NT$49.70.
Among the gaining China concept stocks, Taiwan Cement Corp. (台灣水泥) rose 4.32 percent to end at NT$49.55 on the back of a product price hike in China's Guangdong Province and Nan Ya Plastics Corp. (南亞塑膠) added 1.84 percent to close at NT$72.00.