Domestic shares continue to rise as Wall Street rebounds
Shares in Taiwan rose for the fourth consecutive session Friday as investors took cues from a strong rebound on Wall Street overnight, dealers said.
Buying was seen across the board, with large cap stocks in focus, pushing the weighted index past the 8,000 point mark, dealers said.
The bellwether electronics sector led the upturn on the back of a strong showing by high-tech stocks in the U.S. market, they said.
The weighted index on the Taiwan Stock Exchange closed up 194.63 points, or 2.48 percent, at 8,019.18, after moving between 7,923.77 and 8,039.76. Turnover totaled NT$103.83 billion (US$3.21 billion) during the session.
The market opened up 1.27 percent in a knee-jerk reaction to a 2.27 percent increase on the Dow Jones Industrial Average overnight.
The momentum accelerated, vaulting the index past 8,000 points as investors rushed to raise their holdings in the electronics sector after the tech-heavy NASDAQ index rose 2.45 percent overnight, dealers said.
International Crude Oil
The buying continued throughout the session, extending to other sectors and petrochemical shares in particular, which benefited from the strong rebound of international crude oil prices overnight, dealers said.
“The better-than-expected economic growth in the United States for the second quarter and a sharp rebound of crude oil prices made many investors at home and abroad feel better about the economy,” Ta Ching Securities analyst Andy Hsu said. “That’s why the global equity markets started climbing out of the recent doldrums.”
The U.S. on Thursday reported 3.7 percent economic growth for the April-June period, beating the 2.3 percent forecast. U.S. crude prices subsequently jumped more than 10 percent Thursday to US$42.56 per barrel.
“Such positive economic news made many investors happy and they seized the strong gains on Wall Street to pick up bargains in the local equity market, taking advantage of the recent sell-off,” Hsu said.
He said that since the local electronics sector had been oversold, buying there appeared more visible, pushing up the electronics sub-index 2.31 percent by the close.
“Despite the latest gains, the local high- tech sector remains cheap, Hsu said. “The uptrend in the sector may continue in the next few sessions.”
Among the gaining electronics stocks, integrated circuit designer MediaTek Inc. ( ) rose by the maximum daily 10 percent to close at NT$253.00, and IC packaging and testing services provider Advanced Semiconductor Engineering Inc. gained 5.00 percent to end at NT$33.60.
Hon Hai Precision Industry Co. ( ), an assembler of iPhones and iPads, rose 4.73 percent to close at NT$88.60, and Pegatron Corp. ( ) , which assembles the iPhone 6, added 4.24 percent to end at NT$86.00 after it was reported that Apple Inc. will unveil its next-generation iPhone on Sept. 9.
Largan Returns to
Largan Precision Co. ( ), a smartphone camera lens supplier to Apple, rose 1.35 percent to close at NT$3,000.00, returning to that mark for the first time since Aug. 13.
The stock, the most expensive in the local market, was hard hit by the turmoil in the global equity markets.
The petrochemical sector closed up 5.14 percent on the higher crude oil prices, with Formosa Plastics Corp. ( ) adding 5.38 percent to finish at NT$68.50 and Formosa Chemicals & Fibre Corp. ( ) rising 7.92 percent to end at NT$69.50.
“It’s good that the index closed above the psychological 8,000- point mark, improving market sentiment,” Hsu said. “But the main board is expected to face stiff technical resistance ahead of 8,100 points. Unless turnover increases to about NT$120 billion, it would not be easy to clear that hurdle.”
An investor looks at stock indices, yesterday. After retaining its 10-year mark on Thursday at 7794, the TAIEX surged another 194 points yesterday and regained the 8,000 mark. After a large drop on Monday, Taiwan’s markets rallied four consecutive times to close out a week of volatile trading.