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Taiwan shares rebound on China's Q4 GDP growth
Central News Agency
2013-01-18 03:18 PM
Taipei, Jan. 18 (CNA) Shares on the Taiwan Stock Exchange rebounded Friday from a slump a day earlier on better-than-expected gross domestic product (GDP) growth in China in the fourth quarter of last year, dealers said. The latest China GDP data prompted investors to pick up "China concept stocks" -- companies with close business ties to the mainland -- and Taiwan Semiconductor Manufacturing Co. (TSMC)'s strong 2012 earnings drove buying in the high-tech sector, they said. Turnover remained thin, however, as investors remained wary of corporate earnings reports due later on Wall Street after U.S.-based chip supplier Intel Corp. reported on Thursday a 27 percent decline in net profit in the fourth quarter, they said. The weighted index closed up 116.23 points, or 1.52 percent, at the day's high of 7,732.87, off an early low of 7,676.11, on turnover of NT$69.92 billion (US$2.41 billion). The market opened up 1.06 percent, led by the gains posted by TSMC after the company reported on Thursday record highs in net profit and sales in 2012, dealers said. Momentum accelerated to push the index even higher after China reported that its fourth quarter GDP grew 7.9 percent from a year earlier, higher than a market estimate of 7.8 percent, and also up from a 7.4 percent increase in the third quarter, they said. "The China GDP data lifted companies with footholds on the mainland, in particular stocks of retailers on expectations of strong domestic consumption there," Ta Ching Securities analyst Andy Hsu said. "After yesterday's sell-off, investors also became more willing to hunt bargains due to the positive leads," Hsu said. Among the winning China concept stocks, Ruentex Industries Ltd. gained 3.62 percent to close at NT$74.40, and Ruentex Development Co. rose 3.30 percent to end at NT$62.60. In the old economy sector, Taiwan Cement Corp. added 2.51 percent to close at NT$38.75, and Formosa Plastics Corp. gained 1.78 percent to end at NT$80.20 on hopes that demand in China will increase as economic growth accelerates. "Large-cap high-tech stocks got a boost after TSMC reported strong 2012 results," Hsu said. "On the back of its lead in production technology, TSMC is expected to continue to post higher sales this year." TSMC closed up 2.22 percent at NT$101.50 after reporting NT$166.16 billion in net profit for 2012, up 23.8 percent from a year earlier, and NT$506.25 billion in sales, up 18.5 percent year-on-year. Hon Hai Precision Industry Co., the world's largest contract electronics maker, rose 1.79 percent to close at NT$85.40, while personal computer vendor Asustek Computer Inc. gained 2.10 percent to end at NT$330.00. Despite the gains, Hsu said, many investors still stayed on the sidelines, waiting for results due on Wall Street, in particular Apple Inc., which will release its earnings next week. The paper and pulp, and construction sectors scored the highest gains among the eight major sectors of the market, finishing up 1.8 percent. Machinery and electronics shares rose 1.6 percent, and the financial, and plastics and chemical sectors ended up 1.4 percent. Cement stocks rose 1.2 percent, food shares gained 1.0 percent, and the textile sector closed up 0.6 percent. (By Frances Huang)
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