Shares in Taiwan moved up by more than 100 points to end above the 10,800 point mark Friday as buying focused on large-cap “Apple concept stocks” throughout the session, dealers said.
Largan Precision Co., a smartphone camera lens supplier to Apple, led the upturn after the company released a strong earnings report for the second quarter on Thursday, while buying also spread to other tech stocks and even the old economy sector, pushing the broader market past the 60-day moving average of 10,836 points, they said.
The weighted index on the Taiwan Stock Exchange or the Taiex ended up 126.16 points, or 1.17 percent, at the day`s high of 10,864.54, off a low of 10,769.70, on turnover of NT$141.37 billion (US$4.64 billion).
The market opened up 0.29 percent in the wake of a higher Wall Street, where the Dow Jones Industrial Average closed up 0.91 percent and the tech-heavy Nasdaq index ended up 1.39 percent as concerns over U.S.-China trade friction gave way to better corporate earnings, dealers said.
Buying highlighted the bellwether electronics sector as investors were encouraged to jump into the market by Largan`s second quarter results and momentum accelerated, pushing the Taiex past the 10,800 point mark and the 60-day moving average by the end of the session, they said.
“Jumping over technical hurdles ahead of the 60-day moving average has made the broader market technically healthier, paving the way for further upturn in the near term,” Hua Nan Securities analyst Kevin Su said.
“It was a good day for the local main board as it, like its counterparts in the region, left behind the trade disputes between Washington and Beijing at least for the time being,” Su said.
Su said the electronics sector served as the driver for the gains on the main board throughout the session, accounting for about 70 percent of total turnover Friday.
“Largan led other Apple suppliers to move higher,” Su said, “It seems that investors were impressed by the company`s second quarter results.”
Largan, the most expensive stock on the local market, gained 2.23 percent to close at NT$5,040.00 with 1.09 million shares changing hands after the company said a day earlier that it posted NT$5.50 billion in net profit, up 36.87 percent from a quarter earlier, and also up 16.69 percent from a year earlier.
Its second-quarter gross margin — the difference between revenue and cost of goods sold — stood at 68.61 percent, up 2.28 percentage points from the first quarter and 1.93 percentage points from a year earlier as it included more high-end devices in its product mix.
Other Apple suppliers also attracted buying, with shares in metal casing maker Catcher Technology Co. up 3.32 percent to close at NT$358.00, and touch panel maker General Interface Solution (GIS) Holding Ltd. up 3.56 percent to end at NT$189.00.
Meanwhile, contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock on the local market, rose 1.81 percent to end at NT$224.50. and iPhone assembler Hon Hai Precision Industry Co., second to TSMC in terms of market value, gained 2.09 percent to close at NT$82.90.
In the non-high tech sector, shares in Formosa Plastics Corp. gained 3.77 percent to end at NT$110.00 and Formosa Petrochemical Corp. added 2.11 percent to close at NT$121.00 on the back of high international crude oil prices.
In the wake of rising product prices, shares in Taiwan Cement Corp. rose 1.87 percent to close at NT$43.50, and Asia Cement Corp. gained 0.84 percent to end at NT$36.00.
“Largan delivered good news yesterday, and now investors should keep a close eye on TSMC`s investor conference scheduled for July 19 as its second quarter results and third quarter guidance are expected to move the market,” Su said.
According to the TWSE, foreign institutional investors bought a net NT$1.53 billion worth of shares on the main board Friday.
This article provided by NewsEdge.