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Taiwan shares rebound, up over 200 points

Taiwan shares rebound, up over 200 points

Taipei, Aug. 25 (CNA) Taiwan shares staged a rebound Tuesday morning after recent heavy losses amid hopes the government will use the National Stabilization Fund to prop up the market and restore investor confidence, dealers said. Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in Taiwan's market, attracted strong buying to move sharply higher and served as a catalyst of the broader market's gains, they said. As of 10:54 a.m., the weighted index on the Taiwan Stock Exchange had risen 220.14 points, or 2.97 percent, to 7,630.48 on turnover of NT$65.68 billion (US$2.0 billion). The bellwether electronics sector was up 3.65 percent with shares of TSMC 7.39 percent higher at NT$123.50, with 51.25 million shares changing hands. "After the sell-off seen in the past two sessions, the local equity market had been oversold," Hua Nan Securities analyst Henry Miao said. "In addition to some bargain hunting, the market is benefiting from hopes that the National Stabilization Fund will soon intervene to reverse the slump." Due to volatility in global equity markets, in particular a plunge on Wall Street, Taiwan's weighted index fell more than 619 points, or 7.71 percent, in the past two sessions. The steep decline sparked an outcry by local investors for the National Stabilization Fund to step in. The Cabinet has authorized the fund's committee to enter the market to boost the market if necessary. The NT$500 billion National Stabilization Fund is a mechanism set up by the government to serve as a buffer against unexpected external factors that disrupt the bourse. "Thanks to TSMC, the local equity market is bouncing back," Miao said. "But I still think the stock's gains are simply technical in nature amid lingering concerns over escalating competition from its rivals, in particular Samsung Electronics Co.," Miao said. The analyst said his understanding is that Samsung's development of the advanced 14 nanometer process is proceeding smoothly, which means that TSMC is faced with the likelihood that its clients will shift their orders to the South Korean rival and pressure its stock over the long term. Among other rebounding high-tech stocks, shares of United Microelectronics Corp. (??) had added 4.48 percent to NT$10.50, and AU Optronics Corp. (??) had risen 6.05 percent to NT$9.12 as of 10:54 a.m. The financial sector also bounced back from the recent sell-off, with the sub-index up 2.74 percent. Among the gaining financial stocks, Fubon Financial Holding Co. was up 1.79 percent to NT$51.20, and Cathay Financial Holding Co. had added 3.17 percent to NT$42.30 as of 10:54 a.m. "Despite the current gains, investors should beware of possible volatility down the road as a dive on global equity markets could result in local financial institutions reporting losses on their overseas investments," Miao said. Miao said it was too early to say whether the rebound can be sustained. "Wall Street remains bothered by concerns over global economic conditions, and it could keep falling and spark another round of selling in global markets. Taiwan would have trouble avoiding that," Miao said. (By Frances Huang)


Updated : 2021-09-28 07:58 GMT+08:00