Shares in Taiwan were helped by rotational buying Tuesday as investors ignored the lackluster showings of markets in the United States ahead of an appearance before Congress by Federal Reserve Chairman Jerome Powell, dealers said.
Investors appeared keen to pick up energy storage stocks used in electric vehicles and remained bullish on contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the local market, dealers said.
The Taiex, the Taiwan Stock Exchange’s benchmark weighted index, ended up 94.38 points, or 0.60 percent, at 15,857.89 after moving between 15,749.04 and 15,879.16. Turnover totaled NT$230.08 billion (US$7.52 billion).
The market opened flat after the Dow Jones Industrial Average rose 0.12 percent and the tech-heavy Nasdaq index fell 0.11 percent Monday amid anticipation over Powell’s appearance and possible hints on future interest rate increases, dealers said.
Momentum then picked up in support of electric machinery suppliers because of optimism over higher demand for energy storage equipment as the EV market booms worldwide, they said.
“After the Taiex jumped above the high technical hurdles ahead of 15,171 points (an intraday high seen Feb. 24) yesterday, there was more room for the market to move higher,” MasterLink Securities analyst Tom Tang said.
“Today, rotational buying turned active, with investors looking to put their money into electric machinery stocks.
“Many in the electric machinery industry have moved to develop energy storage devices, such as EV recharging devices, and they were highlighted,” Tang said.
In the electric machinery sector, which rose 2.42 percent, Teco Electric & Machinery Co., one of the companies pursuing opportunities created by EVs, soared 10 percent, the maximum daily increase, to close at NT$35.10.
Others benefiting were Shihlin Electric & Engineering Corp., up 3.40 percent to end at NT$85.10, Allis Electric Co., up 3.38 percent to close at NT$41.30, and Chung-Hsin Electric & Machinery Manufacturing Corp., up 1.55 percent to end at NT$98.50.
Select stocks in the electronics industry were also given a boost by support for the EV market, including Hon Hai Precision Industry Co., which has made a major push to develop EVs to diversify its product portfolio, Tang said.
Hon Hai, which is also a major assembler of iPhones, rose 1.45 percent to close at NT$105.00. Power management solution provider Delta Electronics Inc., which has also entered the energy storage business, gained 3.97 percent to end at NT$301.50.
“TSMC’s strength also helped the Taiex today, although its gains appeared limited on the back of a rising U.S. dollar, which has prompted foreign institutional investors to move funds to greenback denominated assets,” Tang said.
TSMC rose 0.58 percent to close at NT$524.00.
Among other semiconductor stocks, smartphone IC designer MediaTek Inc. added 0.51 percent to close at NT$788.00, and United Microelectronics Corp., a smaller contract chipmaker, lost 0.58 percent to end at NT$52.60.
Elsewhere, the steel sector attracted bargain hunters due to a relatively low valuations and rose 0.91 percent, Tang said.
Yieh Hsing Enterprise Co. gained 2.87 percent to close at NT$12.55, Quintain Steel Co. gained 1.85 percent to end at NT$19.25, Chung Hung Steel Corp. added 1.41 percent to close at NT$28.80, and China Steel Corp., the largest steel maker in Taiwan, ended up 0.97 percent to end at NT$31.10.
The financial sector rose 0.45 percent, with Cathay Financial Holding Co. closing 0.34 percent higher at NT$43.75, but Fubon Financial Holding Co. closed 0.33 percent lower at NT$59.80.
“When Powell speaks, the global markets will react so the upcoming hearing is important,” Tang said. “Investors will also have to keep a close eye on U.S. job data due on Friday, which is expected to weigh on market movements worldwide.”
According to the Taiwan Stock Exchange, foreign institutional investors bought a net NT$3.92 billion in shares on the market Tuesday.
Source: Focus Taiwan News Channel