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Taiwan shares extend gains in mid-morning session

Taiwan shares extend gains in mid-morning session

Taipei, Sept. 17 (CNA) Taiwan shares moved higher in the mid-morning session Thursday, extending gains from a session earlier, as investors were encouraged by a higher Wall Street overnight amid reduced worries over a possible interest rate hike by the U.S. Federal Reserve, dealers said. Buying rotated to non-high-tech stocks, in particular in the financial sector, to push up the weighted index on the main board to over the 8,400-point level, while the bellwether electronics sector also gained strength, although it lagged behind old economy stocks after a rebound the previous day, the dealers said. As of 10:56 a.m., the weighted index on the Taiwan Stock Exchange had added 1.16 percent to 8,430.16 points on turnover of NT$53.15 billion (US$1.64 billion). The financial sub-index was up 1.97 percent and the petrochemical sub-index was 1.77 percent higher. "Fears over the likelihood of the Fed raising interest rates have been eased to some extent after the U.S. reported a drop in the consumer price index for August," Ta Ching Securities Investment Consulting analyst Eric Lai said. "That's why Wall Street posted gains for the second consecutive session overnight, and the Taipei market followed suit to move higher today." The Dow Jones Industrial Average closed up 0.84 percent, the tech-heavy NASDAQ index ended up 0.59 percent and the S&P 500 index closed 0.87 percent Wednesday after the August CPI in the U.S. fell 0.1 percent, the first drop in seven months. "As more and more investors have anticipated that the Fed will not kick off an interest rate hike cycle later in the day after wrapping up a two-day policymaking meeting, there have been signs that foreign institutional investors are moving funds into the Asian region and Taiwan is one of the beneficiaries," Lai said. Lai said that the strength of the Taiwan dollar against the U.S. dollar is evidence of foreign fund inflows, although the local central bank continued its intervention to prop up the greenback and slow the pace of the local currency's appreciation. "Foreign institutional investors still built a net of long- position contracts in the futures market. It is possible that they will push up share prices on the spot market to profit in futures," Lai said. Buying focused on the financial and old economy sectors Thursday, while investors moved some of their funds from the high-tech sector, which served as the driver to the upturn of the local main board the previous day, to non-high-tech stocks, Lai said. In the financial sector, Fubon Financial Holding Co. (???) had gained 3.00 percent to NT$54.90, and rival Cathay Financial Holding Co. (???) had risen 2.69 percent to NT$47.70 on strong rotational buying as of 10:56 a.m. In the petrochemical sector, which was boosted by a rebound in international crude oil prices, Formosa Petrochemical Corp. (???) had risen 3.47 percent to NT$77.60, and Nan Ya Plastics Corp. (??) had added 2.04 percent to NT$60.10. Among the electronics stocks, Taiwan Semiconductor Manufacturing Co. (???) had added 0.77 percent to NT$130.50, while integrated circuit packaging and testing services provider Siliconware Precision Industries Co. (??) had fallen 0.47 percent to NT$42.35. Lai said that the weighted index is expected to encounter strong technical resistance as it moves closer to 8,500 points in the near term. (By Frances Huang)


Updated : 2021-09-21 21:49 GMT+08:00