Domestic shares end above 7,800 points following Wall Street gains
Shares in Taiwan closed above the 7,800 point mark Thursday after Wall Street bounced back strongly overnight on hopes that the U.S. Federal Reserve is in no hurry to raise interest rates, dealers said.
The local bellwether electronics sector simply followed hightech stocks in the U.S. market to move higher as “Apple concept stocks” led the upturn in the wake of a significant rebound staged by Apple Inc. shares overnight, they said.
The weighted index on the Taiwan Stock Exchange ended up 108.96 points, or 1.41 percent, at 7,824.55, after moving between 7,762.63 and 7,856.40, on turnover of NT$108.99 billion.
The market opened up 0.75 percent on the back of a 3.95 percent spike in the Dow Jones Industrial Average and a 4.24 percent rise in the tech-heavy NASDAQ index overnight, dealers said.
Momentum accelerated, led by high- tech heavyweights in the Apple supply chain, as such smartphone camera lens maker Largan Precision Co. ( ) and metal casing supplier Catcher Technology Co. ( ), after Apple’s shares posted 5.74 percent gains on Wall Street to vault the index past 7,800 points by the
end of the session, they said.
Gains on Wall Street Overnight
“After recent sell-off, the local equity market simply staged a technical rebound today by seizing the gains posted on Wall Street overnight as a cause to buy,” Concord Securities analyst Kerry Huang said. “The electronics sector was in focus amid buying as many hightech stocks had been oversold.”
Among the rising suppliers to Apple, Largan, the most expensive stock in the local market, rose 2.78 percent to close at NT$2,960.00, off an early high of NT$3,030.00, and Catcher also gained 6.69 percent to end at NT$335.00.
“Largan is a barometer of buying interest in the local market. Its gains have been encouraging to many investors. But, based on today’s movements, the stock has been faced with stiff technical resistance ahead of the 20-day moving average of around NT$3,000,” Huang said. The electronics subindex closed up 1.83 percent.
Also in the electronics sector, contract chip-maker Taiwan Semiconductor Manufacturing Co. (
), the most heavily weighted stock in the local market, added 1.22 percent to NT$124.00, and Hon Hai Precision Industry Co. (
), which assembles iPhones and iPads for Apple, rose 1.32 percent to end at NT$84.60.
Contract notebook computer maker Wistron Corp. ( ) gained 10 percent, the maximum daily increase, to close at NT$15.05 after the company unveiled a program Wednesday to buy back up to 80 million shares from the open market at a price range between NT$12-NT$23.
The financial sub-index ended up 0.79 percent but underperformed the broader market since some investors locked in their earlier gains built for financial stocks in the past few sessions, Huang said.
In the sector, E. Sun Financial Holding Co. ( ) gained 0.78 percent to close at NT$19.40, while Cathay Financial Holding Co. (
) ended unchanged at NT$44.60, and CTBC Financial Holding Co. (
) fell 1.03 percent to close at NT$19.20.
“Although the weighted index closed above 7,800 points, whether the rebound will continue will depend on how Wall Street will perform,” Huang said.
“If the Chinese yuan turns stable, investor confidence in the global financial markets, including Wall Street, will recover accordingly, and the Taipei market will follow suit to move even higher,” he said.