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Taiwan shares rally, led by high-tech stocks

Taiwan shares rally, led by high-tech stocks

Taipei, May 23 (CNA) Shares in Taiwan jumped more than 200 points to close above the 8,300-point mark Monday, led by heavyweights in the bellwether electronics sector who benefited from an upturn in turnover, dealers said. Taiwan Semiconductor Manufacturing Co. (TSMC), the most weighted stock in the local market, steamed ahead in the wake of a 3.16 percent increase in the Philadelphia Semiconductor Index on Friday, they said.

"Apple concept stocks" staged a strong rebound amid optimism over the next generation iPhones expected to be unveiled in the third quarter, and buying also spread to the non-high-tech sector, which gave an additional boost to the broader market, they said.

The weighted index on the Taiwan Stock Exchange ended up 213.18 points, or 2.62 percent, at 8,344.44, after moving between 8,119.71 and 8,356.96 on turnover of NT$90.07 billion(US$2.76 billion).

Monday's closing level was the highest since April 29, when the weighted index ended at 8,377.90.

The market opened up 0.24 percent on follow-through buying from a session earlier but selling re-emerged soon after to drag the weighted index into negative territory, dealers said.

Bargain hunters turned active midway through the morning, however, to pick up large cap stocks, in particular in the electronics sector, because of strong gains posted Friday by U.S. integrated circuit stocks, sending the market significantly higher at the close.

The market had been weighed down by uncertainty over Taiwan's ties with China ahead of the inauguration of President Tsai Ing-wen on May 20.

Tsai's Democratic Progressive Party is not seen as being as friendly to China as the previous Kuomintang administration, and Tsai and her party have not accepted the "1992 consensus" that has underpinned relations with Beijing over the past eight years.

"President Tsai Ing-wen's inaugural speech on May 20 was in line with market expectations. Many in the market had already anticipated that Tsai would not mention the 1992 consensus China wanted to hear," KGI Securities analyst Phil Chu said.

The "1992 consensus" refers to a tacit agreement between the two sides of the Taiwan Strait on "one China," with each side free to interpret what that means.

Although China described Tsai's speech as an "incomplete test paper," Beijing has not reacted too negatively to the absence of any mention of the "1992 consensus" in her address, Chu said.

"So today's market movement largely reflected the gains posted on Wall Street. I suspected the expanded turnover came from foreign institutional investors who switched to the buy side from massive selling in recent sessions," Chu said.

According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$8.49 billion in shares on the main board after being net sellers of NT$120.9 billion in shares the previous 16 sessions.

In the semiconductor sector, which closed up 3.95 percent, TSMC, the world's largest contract chip maker, gained 3.70 percent to close at NT$154.00 with 50.15 million shares changing hands.

Advanced Semiconductor Engineering Inc., the world's largest IC packaging and testing firm, rose 7.76 percent to end at NT$31.25.

"Apple concept stocks enjoyed an upturn today on positive leads on the next iPhone after they had been depressed for some time," Chu said.

He was referring to a report on Monday saying that Apple has asked its suppliers to prepare to produce up to 78 million units of the next-generation iPhones by the end of this year, 20 percent more than the market had estimated.

Among the stocks in the Apple supply chain, Hon Hai Precision Industry Co., an assembler of iPhones and iPads, rose 4.59 percent to close at NT$77.40, and smartphone camera lens maker Largan Precision Co. added 2.46 percent to end at NT$2,710.00.

"After today's strong showing, Taiwan's equity has become technically stronger. So it's possible that the weighted index will challenge the 240-day moving average at around 8,500 points in the short term," Chu said. (By Frances Huang)

Updated : 2022-05-28 01:05 GMT+08:00