TAIPEI: The New Taiwan dollar yesterday touched a two-month high as foreign funds poured into the nation’s stock market amid growing optimism over global growth, before the central bank intervened to curb gains.
The monetary authority made the move at noon, according to two traders who asked not to be identified because they are not authorized to speak publicly.
Overseas investors have bought a net US$407 million Taiwanese shares this week as the benchmark TAIEX rose to its highest level since November last year.
The NT dollar rose NT$0.191, or 0.57 percent, to close at NT$33.179 on the Taipei Forex Inc. The currency earlier reached NT$32.954, the strongest level since Jan. 4. The spot rate retreated 0.4 percent in the last two minutes of trading before the midday break. The central bank, which intervenes almost every day near the close, has also occasionally stepped in at noon.
“The good performance in stocks is attracting foreign funds, but this is a short-term fund movement,” Taipei-based Jih Sun Securities Co economist Cary Ku said. “The economic fundamentals and GDP growth do not support further appreciation.”
Taiwan last month cut its economic growth forecast for this year as China’s slowdown weighed on export demand.
The local currency might slowly depreciate after consolidating at about NT$33, Ku said, adding that stock inflows might lose momentum as the TAIEX approaches 8,600.
The TAIEX yesterday rose 67.74 points, or 0.79 percent, to close at 8,611.79, the highest in four months, on turnover of NT$100.49 billion (US$3.03 billion)
A total of 2,630 stocks closed up, 3,127 ended down and 411 were unchanged, according to the Taiwan Stock Exchange.
Dealers said ample liquidity continued to prompt investors to pick up stocks, pushing up the benchmark index past the 8,600-point mark.
The financial sector kept moving higher, extending momentum from a session earlier on the back of bargain hunting to serve as the major driver of the broader market’s upturn, while select electronics heavyweights trended higher to give another boost, dealers said.
Fubon Financial Holding Co rose 2.49 percent to close at NT$41.15, Cathay Financial Holding Co added 3.27 percent to end at NT$39.45, and E.Sun Financial Holding Co gained 3.49 percent to close at NT$18.8.
Buying also focused on select raw material stocks, in particular the steel sector, which posted significant gains on hopes that shipments to the US market are to increase after Washington imposed heavy anti-dumping and anti-subsidy tariffs on Chinese steel products, dealers said.
China Steel Corp rose 4.07 percent to close at NT$21.75, while Chung Hung Steel Corp soared 10 percent, the maximum daily increase, to end at NT$6.61.
Additional reporting by CNA
