Market surges on overnight Nasdaq rise

By Sandra Chuang, The China Post

The Taiwan stock market surged yesterday, marking its biggest single-week rise in point terms since mid-February. The index rose 72.93 points, or 1.4 percent, to close at 5,226.28, while the daily turnover extended from Thursday’s NT$54 billion to NT$92.3 billion.

The index rose 77.82 points at the opening in response to the sharp rise in the Nasdaq overnight. The gains encouraged sidelined investors to jump back in, boosting the market to break through the 5,200-point resistance level. However, small amounts of profit taking emerged in the later trading hours.

“Investors took their lead from the solid gains in electronics shares after the overnight rises of their U.S. counterparts,” said a local analyst. “Active trade in semiconductors pushed the market upward,” he added.

“In addition, the market at large was bolstered by improved sentiment after President Chen Shui-bian expressed his willingness to seek an extraordinary legislative session,” he said.

Technology shares were mostly higher, particularly those of DRAM chip manufacturers, with investors gaining confidence on big gains in U.S. stocks overnight. Some purchases were also sparked by common beliefs that the market was ready for a rebound after Thursday’s pullback.

Taiwan Semiconductor Manufacturing gained 4.3 percent to close at NT$97 while United Microelectronics added 2.8 percent to stand at NT$55.5. Financial shares won modest gains as President Chen indicated willingness to ask the legislature to review a number of bills on financial services, including that on financial holding companies act.

Traditional shares were mixed, in reaction to the fact that most shares have shown excessive downward movement over the past few days.