Taiex rose 199.75 points, or 1.13 percent, at 17,861.23 on turnover of US$11.83 billion
Taiwan shares staged a strong technical rebound on Monday morning as investors took cues from a rally on the U.S. markets at the end of last week, dealers said.
With fears over a possible interruption in the global economic recovery amid COVID-19 fading, bargain hunters rushed to pick up large cap stocks in both electronics and non-tech sectors, helping the main board climb out of a 1.15 percent plunge on Friday, they said.
Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), rose 199.75 points, or 1.13 percent, at 17,861.23 on turnover of NT$331.23 billion (US$11.83 billion).
The market opened up 1 percent as the three major indexes on the U.S. markets hit all-time highs on Friday.
The strength of the market was driven by buying in the electronics sector, in particular in large cap stocks such as those of contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC), while select shipping and steel stocks rode the waves of a cyclical recovery, dealers said.
But with the Taiex breaching the 17,900-point mark at one point, some profit taking emerged to cap the upturn to some extent with the index off an early high of 17,947.90, dealers added.
Look at the solid gains on the U.S. markets. I think many investors have left behind concerns over the economic recovery amid a spike in COVID-19 cases worldwide, said Hua Nan Securities analyst Kevin Su, referring to a rebound in U.S. treasury yields, which pushed up the Dow Jones Industrial Average by 1.30 percent to a new high on Friday.
Buying in large cap tech stocks resumed after their recent consolidation, led by TSMC, Su said.
Following a 2.28 percent increase in its American depositary receipts (ADRs) on Friday, TSMC, the most heavily weighted stock in the local market, had added 1.37 percent to its share price, which rose to NT$592.00 (US$21.14), and United Microelectronics Corp. had added 3.07 percent to NT$53.80 (US$1.92) after a 2.25 percent rise in its ADRs.
Among the shipping stocks, Yang Ming Marine Transport Corp. had added 3.32 percent to NT$202.00 (US$7.21), and Wan Hai Lines Ltd. had risen 4.36 percent to NT$287.00 (US$10.25).
In the steel sector, Tung Ho Steel Enterprise Corp. had added 1.51 percent to NT$53.80 (US$1.92), and Kao Hsing Chang Iron & Steel Corp had gained 5.18 percent to NT$27.40 (US$0.98).
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