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Local bourse ends above 9,400 points on ECB stimulus program

Local bourse ends above 9,400 points on ECB stimulus program

Taipei, Jan. 23 (CNA) Shares in Taiwan closed higher on expanded turnover Friday as foreign funds flowed into the market following the European Central Bank's (ECB) announcement overnight of a massive stimulus program, dealers said. Buying focused on large-cap stocks in the bellwether electronics sector, such as Taiwan Semiconductor Manufacturing Co. (TSMC, ???) and smartphone camera lens supplier Largan Precision Co. (???), giving the broader market momentum throughout the session, they said. The food sector staged a strong rebound led by Wei Chuan Foods Corp. (??) after its parent company, Ting Hsin International Group (??), repaid an overdue syndicated loan on behalf of the group's property subsidiary, in which Wei Chuan holds a 51 percent stake, they said. The weighted index on the Taiwan Stock Exchange closed up 101.43 points, or 1.08 percent, at 9,470.94, after moving between 9,422.00 and 9,471.80, on turnover of NT$118.76 billion (US$3.79 billion). The market opened up 0.75 percent to breach 9,400 points in a knee-jerk reaction to a rally on Wall Street overnight after the ECB announced that it will buy 60 billion euros (US$68.19 billion) in bonds every month starting in March, dealers said. Interest in market heavyweights in the high-tech sector continued and spread to the old economy sector to keep the broader market above the 9,400-point mark for the rest of the session, they said. "Judging from the expanded trading volume and the gains posted by blue chips, I think foreign institutional investors were the major buyers in the local market today," Concord Securities analyst Kerry Huang said. According to the TWSE, foreign institutional investors bought a net NT$21.27 billion in shares on the main board Friday. "The size of the quantitative easing program unveiled by the ECB was higher than the market expected. With that much liquidity, foreign investors were willing to move their funds into the region, and Taiwan was one of the beneficiaries," Huang said. Because of the heavy foreign institutional buying, Huang said, the electronics sector closed up 1.64 percent, helping the broader market move higher. "Foreign investors tend to target high-tech blue chips, such as TSMC and Largan, as places to park their funds because these electronics companies have strong bottom lines and are a safe bet," Huang said. TSMC, the most heavily weighted stock in the local market, rose 3.57 percent to end at NT$145.00, with 82.24 million shares changing hands. Investors were hopeful that the world's largest contract chip maker will post higher earnings per share this year than the NT$10.18 in EPS recorded last year. Largan, one of Apple Inc.'s local suppliers, gained 5.52 percent to close at NT$2,770, the highest level in the stock's history, on hopes that the company will continue to benefit from orders placed by the U.S. consumer electronics giant. Hon Hai Precision Industry Co. (??), which assembles iPhones and iPads for Apple, emerged from a recent period of consolidation to close 2.69 percent higher at NT$87.80. In the food sector, which closed up 1.82 percent, Wei Chuan rose 7 percent, the maximum daily increase, to end at NT$26.15 after its parent company repaid a NT$6.5 billion syndicated loan on behalf of its property unit, Ting Lu Development Co., to a consortium led by Mega International Commercial Bank. Rival Uni-President Enterprises Corp. (??) closed up 2.73 percent at NT$52.60. "The local bourse has become technically healthier after today's gains," Huang said. "And it's possible foreign investors may move more funds into the region to push the local index even higher." (By Frances Huang)


Updated : 2021-09-25 10:36 GMT+08:00