Taipei, March 20 (CNA) Shares in Taiwan staged a significant technical rebound, soaring more than 400 points Thursday led by the electronics sector, as buying was triggered by a U.S. rally following a Federal Reserve decision described by the market as dovish, dealers said.
The Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), ended up 416.43 points, or 1.90 percent, at the day’s high of 22,377.26, coming off a low of 22,171.00. Turnover totaled NT$270.13 billion (US$8.18 billion), compared with NT$316.99 billion seen Wednesday.
“Judging from today’s performance at home and abroad, investors appeared happy with the Fed’s decision to slow down its pace in quantitative tightening, although the American central bank left interest rates unchanged this time,” Moore Securities Investment Consulting analyst Adam Lin said, referring to a 0.92 percent increase on the Dow Jones Industrial Average and a 1.41 percent rise on the tech-heavy Nasdaq index overnight.
After the latest policymaking meeting, the Fed released its dot plot, which indicates individual members’ expectations for rates and hinted that the bank will cut rates twice this year.
“The Taiex had fallen sharply in recent sessions so investors just seized the U.S. gains to hunt bargains with the electronics sector in focus,” Lin said.
The electronics index rose 2.46 percent after contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock here, rose 3.47 percent to close at the day’s high of NT$985.00, contributing about 265 points to the Taiex’s rise.
Led by TSMC, IC packaging and testing service provider ASE Technology Holding Co. gained 2.85 percent to end at NT$162.50, and smartphone IC designer MediaTek Inc. added 1.37 percent to close at NT$1,485.00.
Artificial intelligence-related stocks also bounced back from a recent slump with iPhone assembler and AI server maker Hon Hai Precision Industry Co., second to TSMC in terms of market value, ending up 1.22 percent at NT$166.00. Quanta Computer Inc., another AI server supplier, rose 1.38 percent to close at NT$257.00, and AI graphics card vendor Giga-Byte Technology Co. ended up 1.52 percent at NT$268.00.
Lin said buying was seen across the board, although the gains posted by nontech stocks were largely capped.
Amid rotational buying, the construction index rose 1.36 percent with Kindom Development Co. up 2.50 percent to close at NT$57.40 and Shining Building Business Co. up 2.44 percent to end at NT$10.50.
On higher international crude oil prices, Formosa Plastics Corp. rose 1.62 percent to close at NT$40.80, and Nan Ya Plastics Corp. gained 1.32 percent to end at NT$34.55.
In the financial sector, which rose 0.42 percent, Fubon Financial Holding Co. rose 1.01 percent to close at NT$89.90, and Cathay Financial Holding Co. ended up 0.92 percent at NT$65.90.
“Despite the gains, turnover was reduced indicating many investors stayed wary of uncertainties posted by the Trump administration’s tariff actions,” Lin said. “Without expanded turnover, the Taiex could continue to move in consolidation mode.”
According to the TWSE, foreign institutional investors bought a net NT$21.83 billion worth of shares on the main board Thursday.
