Taiwan shares scaled a fresh all-time closing high on Friday, as robust buying in the electronics sector, particularly heavyweight Taiwan Semiconductor Manufacturing Co (TSMC), pushed up the local bourse for another high with its gains. Analysts said the overwhelming sentiment was inspired by the gains across U.S. markets in the previous session.
Tech stocks lead the rally
Led by TSMC, the bellwether electronics sector led the gains. The buoyant progress came on the back of the chipmaker’s performance in its expansion into other technology stocks and the development of artificial intelligence (AI), which further buoyed the market.
TWSE Taiex closed at 20,294.45, with a gain of 147.90 points or 0.73%. The new peak was closed at 20,228.43 points, registered on March 22, but it is now broken. Trading volume reached NT$475.39 billion (US$14.86 billion).
TSMC boosts semiconductor sub-index
Contributing importantly to the positive performance, the largest shares of TSMC, which went most of the way into propelling the Taiex surge, rose 1.30 percent to close at NT$779.00.
Another major increase came from the semiconductor sub-index and added to quite a big 1.42% gain, reflecting strength in the semiconductor sector.
It is not only TSMC that is bouncing back; other semiconductor manufacturers and their stocks are also seen bouncing back with strong numbers, especially AI development-based ones. The financial market’s center for chip manufacturing saw rival Global Unichip Corp. MediaTek Inc., Alchip Technologies Ltd., and a host of other AI-related businesses also making similar substantial gains, reflecting renewed investor interest in such technologies.
Liquidity-driven rally
However, market analysts attributed the rally in the market to liquidity-driven factors, as even bargain hunters were seen taking the opportunity given by the higher Dow Jones Industrial Average and weakness of the previous session in the Taiex, with both institutional and retail investors, more particularly by the locals, were active in the spree of buying.
Simultaneously, there was also a notable investment inflow witnessed into old-economy industries like cement and petrochemicals. From this space, sectors benefited from relatively lower valuations, whereas consolidation has been missing for a long time. This is because Taiwan Cement Corp and Nan Ya Plastics Corp figured among gainers from these sectors.
In the financial sector, strong gains accumulated, and there was a growth of 0.79 percent. In financials, Cathay Financial Holding Co. and Fubon Financial Holding Co. counted for the largest gains. The banking division also managed to gain, and from its camp emanated this overall sentiment.
Outlook and economic data
With the U.S. and U.K. markets closed in observance of the Good Friday holiday, attention will be turned to important economic data releases over the next couple of sessions, highlighted by the February personal consumption expenditures price index (PCE). This is the type of data that both markets and—more importantly—the Federal Reserve have in regard to inflation, and it may stir around some movements.
Taiwanese stocks finished higher for the week as the stock market hit new all-time closing highs. Tech was notably strong, fueled by the strength of TSMC and related AI stocks. That has prompted the investors’ impetus to continue doing so with the positive momentum and the prospect of the economic front data releases, even as U.S. markets remain closed for trading.