Taiwan shares soar over 10% in Year of Rooster

Taipei, Feb. 12 (CNA) Shares in Taiwan closed more than 10 percent higher in the Year of the Rooster, largely on the back of strong foreign institutional buying for most of the year.

In the Year of the Rooster, in which trading started from Feb. 2, 2017 and ended Monday, the weighted index on the Taiwan Stock Exchange closed up 937.14 points, or 10.3 percent, marking the second consecutive year in which the Taiex had ended up more than 10 percent on the Lunar calendar.

In the previous year — the Year of the Monkey — in which trading started Feb. 15, 2016 and ended Jan. 24, 2017, the Taiex closed up 17.18 percent.

In the Year of the Rooster, foreign institutional investors bought a net NT$83 billion (US$2.84 billion)-worth of shares on the main board as foreign funds kept flowing into regional markets during most of the year.

On Friday, the Taiex closed up 0.48 percent at 10,421.09 after Wall Street staged a technical rebound of 1.38 percent, while foreign institutional investors stood on the sell side, registering a net sale of NT$19.38 billion-worth of shares on the main board.

The local equity market faced volatility last week, when Wall Street took a beating amid rising fears that the U.S. Federal Reserve will speed up its pace of carrying out an interest rate hike cycle at a time of a solid economic recovery.

Selling by foreign institutional investors Monday resulted from margin call demand for investors in the U.S. Concerns over further volatility on Wall Street remain.

It was the first time the Taiex had closed above the 10,000-point mark at the end of a year on the Lunar Calendar in 18 years.

The Taiex topped the 10,000-point level in mid-May 2017 for the first time in 17 years and continued to trade above that level in the following sessions into Monday.

Market capitalization on the main board rose NT$3.36 trillion in the Year of the Rooster to NT$31.25 trillion Monday, so based on the 3.12 million investors with securities trading accounts, each of them generated about NT$1.08 million in gains on average for the year.

Trading of the local equity market will resume Feb. 21 after the Lunar New Year holiday.

Despite the gains posted Monday, market sentiment was cautious ahead of the holiday, as fears that negative leads will come up in the global markets during the holiday, analysts said.

How the local market will perform Feb. 21 will depend upon how Wall Street moves during the holiday, the analysts added.

Source: Focus Taiwan