Taiwanese shares rose yesterday as investors responded to an overnight rally in the US triggered by the US Federal Reserve ruling out the possibility of overly aggressive rate hikes later in the year, dealers said.
The bellwether electronics sector attracted buying throughout the session as investors searched for bargains among heavily affected tech heavyweights, while the financial sector came under pressure to cap the upturn on the broader market, they said.
The TAIEX closed up 130.29 points, or 0.79 percent, at 16,696.12. Turnover totaled NT$250.848 billion (US$8.5 billion), with foreign institutional investors buying a net NT$3.83 billion of shares on the main board, Taiwan Stock Exchange data showed.
Photo: CNA
“The gains on the US markets came as investors felt relieved as the Fed did not appear as hawkish as previously expected,” Hua Nan Securities Co (華南永昌證券) analyst Lu Chin-wei said.
After a two-day policymaking meeting, which concluded overnight, the Fed raised its key interest rates by 50 basis points after a 25 basis point hike in March.
However, Fed Chair Jerome Powell ruled out more aggressive action, saying that the committee was not considering a 75 basis point increase.
“The 50 basis point rate hike at the May meeting had been widely anticipated by the markets worldwide. Now, Powell’s remarks simply prompted investors at home and abroad to buy, and in Taipei, tech heavyweights got a boost from reduced worries over a more aggressive Fed,” Lu said.
The electronics sector rose 1.29 percent and accounted for about 54 percent of yesterday’s total turnover, with the semiconductor subindex up 1.70 percent.
The transportation and steel sectors also rose 0.95 percent and 1.16 percent respectively, but the financial sector underperformed the TAIEX, closing down 1.02 percent.
“Judging from today’s movement, I suggest investors to stay alert over the weakness in the financial sector. The interest rate hike leads had been largely reflected in financial stocks’ recent gains,” Lu said. “The local main board is likely to rebound further, but if the TAIEX fails to close above 17,000 points, the gains would not be strong enough to lead the market to return to an uptrend at a time of a rate hike cycle.”
PRICE HIKES: The war in the Middle East would not significantly disrupt supply in the short term, but semiconductor companies are facing price surges for materials Taiwan’s semiconductor companies are not facing imminent supply disruptions of essential chemicals or raw materials due to the war in the Middle East, but surges in material costs loom large, industry association SEMI Taiwan said yesterday. The association’s comments came amid growing concerns that supplies of helium and other key raw materials used in semiconductor production could become a choke point after Qatar shut down its liquefied natural gas (LNG) production and helium output earlier this month due to the conflict. Qatar is the second-largest LNG supplier in the world and accounts for about 33 percent of global helium output. Helium is
DOMESTIC COMPONENT: Huang identified several Taiwanese partners to be a key part of Nvidia’s Vera Rubin supply chain, including Asustek, Hon Hai and Wistron Nvidia Corp chief executive officer Jensen Huang (黃仁勳), addressing crowds at the company’s biggest annual event, unveiled a variety of new products while predicting that its flagship artificial intelligence (AI) processors would help generate US$1 trillion in sales through next year. During a two-and-a-half-hour keynote address, Huang announced plans to push deeper into central processing units (CPUs) — Intel Corp’s home turf — and introduced semiconductors made with technology acquired from start-up Groq Inc. The company even said it was developing chips for data centers in outer space. At the heart of Huang’s speech was the message that demand for computing power
OPTIMISTIC: Inflation still has a chance of remaining below the central bank’s 2 percent alert level, as Taiwan’s economy is resilient with healthy exports, the NDC minister said Taiwan’s inflation could exceed 2 percent this year if oil prices continue to surge amid escalating tensions in the Middle East, prompting the government to reassess its economic outlook, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday. DGBAS Minister Chen Shu-tzu (陳淑姿) told lawmakers at a meeting of the legislature’s Finance Committee that the agency’s earlier growth forecast of 1.68 percent in the consumer price index (CPI) and 7.71 percent for GDP this year did not account for the ongoing Middle East conflict and would need revision, if tensions persist. The previous forecast assumed an average international crude price of
ELECTRIC DREAMS: Smart cities would use ‘virtual power plants,’ which integrate idle electricity use from households, businesses and factories, Asustek said Asustek Computer Inc (華碩) yesterday showcased key components of its artificial intelligence (AI)-driven smart city initiatives at a trade show in Taipei, eyeing new business opportunities as cities develop sovereign AI infrastructure. Advances in generative, multimodal and physical AI are driving cities toward a new phase of “sovereign AI,” Asustek cochief executive officer Samson Hu (胡書賓) told reporters on the sidelines of the Smart City Summit and Expo at Taipei Nangang Exhibition Center’s Hall 2. The company showcased its “AI City” framework, which comprises three layers — computing infrastructure centered on AI servers, AI models and a platform layer for data processing
RSS