Taiwan shares rebound led by tech stocks
05/14/2021 11:13 AM
CNA file photo
Taipei, May 14 (CNA) Taiwan shares staged a technical rebound Friday morning, as bargain hunters took advantage of the heavy losses in the previous three sessions to pick up large-cap tech stocks, dealers said.
The gains, however, were capped ahead of 16,000 points, as market sentiment remained haunted by worry over the growing number of domestic COVID-19 cases, dealers said.
As of 10:10 a.m., the Taiex, the weighted index on the Taiwan Stock Exchange (TWSE), was up 255.32 points, or 1.63 percent, at 15,925.42, after an earlier high of 16,075.48. The bellwether electronics sector had gained 2.19 percent.
Over and over again, Federal Reserve officials have advised that any pickup in inflation this year was bound to be transitory. Traders in financial markets, however, aren’t so sure. Investors have become fixated on widespread signs of price pressures as commodities like copper and lumber surge to records, and the bond market’s expectation for inflation over the next decade climbs to an eight-year high. The focus is triggering swings in the stock market, sending the Cboe Volatility Index to the highest since March on Tuesday. The most-recent round of U.S. corporate earnings calls showed the word inflation was back in vogue, with its usage rising 800% from a year ago, according to Bank of America Corp. Even last week’s payrolls report, which showed the U.S. added only about a quarter of the jobs economists expected in April, is being viewed as a sign that companies will have to boost wages to entice more unemployed workers into the labor force.
Six Best Semiconductor Stocks to Buy Now Appear Undervalued
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Six best semiconductor stocks to buy now are trading at discounts compared to slower-growing industrial stocks.
S&P 500 semiconductor stocks trade at an average of 19x 2022 price-to-earnings (P/E) estimates, nearly 20% below the S&P 500 Industrials, despite free cash flow (FCF) margins 1,500-2,000 basis points (bps) above and 400-500 bp faster sales growth than the industrials, according to a May 11 BoA Global Research note. Semiconductor stocks share attributes with high-quality industrials, with the current relative weakness in semiconductor stocks indicated by the SOX index vs. industrials (XLI) showing market rotation rather than trading based on fundamentals, BoA reported.
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