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Taiwan shares stage strong rebound, led by large-cap stocks

Taiwan shares stage strong rebound, led by large-cap stocks

Shares in Taiwan staged a strong rebound Tuesday as large-cap stocks attracted bargain hunters to take advantage of their latest heavy losses recorded a session earlier, dealers said.

The bellwether electronics sector was the focus of the buying with Taiwan Semiconductor Manufacturing Co. (TSMC) and Hon Hai Precision Industry Co. leading the upturn, while enthusiasm in the petrochemical, and cement sectors pushed the weighted index even higher, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 142.69 points, or 1.71 percent, at 8,463.30 after moving between 8,339.50 and 8,463.60, on turnover of NT$90.13 billion (US$2.76 billion).

The market opened up 0.46 percent and buying accelerated with market heavyweights almost across the board spotlighted, and interest grew visibly toward the end of the session to lift the index up sharply, bouncing back from a 0.93 percent decline on Monday, dealers said.

On Monday, investors rushed to dump stocks before a cut in Taiwan's weighting in three MSCI indexes became effective after the close that session. Before Monday, investors had started cutting their holdings after MSCI announced the index adjustments on Nov. 12.

"Today's bargain hunters emerged to pick up large-cap stocks. I think that these market heavyweights had been oversold in recent sessions, their rebounds appeared very strong on Tuesday, making themselves technically healthier," Ta Ching Securities analyst Andy Hsu said.

"The latest gains are expected to pave the path for further upturns in the local main board to challenge the nearest technical resistance at around 8,500 points in the near term," Hsu said.

The electronics sector closed up 2.08 percent and the semiconductor sub-index ended up 2.42 percent, serving as a driver of Tuesday's strong rebound, dealers said.

TSMC, the most heavily weighted stock in the local market, gained 2.52 percent to close at NT$142.50, and Hon Hai, an assembler of iPhones and iPads for Apple Inc., added 2.38 percent to end at NT$86.00.

"The two stocks appeared resilient yesterday and government-led funds were believed to have to lent support to them. I think such buying in the two stocks continued today, helping the broader market move sharply higher," Hsu said.

Among other surging high-tech stocks, smartphone camera lens supplier Largan Precision Co. rose 3.38 percent to close at NT$2,600.00 to remain the most expensive stock in the local market, while contract notebook computer market Quanta Computer Inc. added 3.14 percent to end at NT$52.60.

In the old economy sector, Formosa Plastics Corp. rose 2.58 percent to close at NT$75.60, Nan Ya Plastics Corp. gained 4.10 percent to end at NT$61.00, and Asia Cement Corp. added 4.34 percent to end at NT$28.85.

"Market sentiment has improved to some extent after today's gains," Hsu said. "But, investors should pay close attention to the upcoming non-farm payroll data in Washington (due Friday) for more clues about the state of the U.S. economy and a possible change in the Federal Reserve's monetary policy."

Updated : 2021-09-19 08:01 GMT+08:00