Nick Land, The China Post
Taiwan shares rose just under 1 percent or 43.85 points yesterday, to reach 4,520.76. Turnover fell slightly to NT$39.1 billion from Friday’s NT$42.4 billion. A basically cautious market was nudged upwards by a positive response to local financial reform proposals and encouraging prospects for cross-strait relaxation, breaching the 4,500-points barrier despite waves of profit-taking. Financial titles, especially those with strong mainland links, led the market advance, which was impeded by the weak performance of high-tech stocks.
According to one broker: “The positive news on the China ties front and banking reform helped the market to register a solid rise. Had it not been for these developments, the market probably would have staged a pull-back.”
The foundry majors both lost some ground. TSMC was down 0.7 percent and UMC down 1.6 percent. Electricals acted as a drag on the market, with the sector falling back in aggregate.
Numerous banking and insurance companies made near up-limit gains after months of generally weak performance. The “Big 3” commercial banks ended up 6.6-6.9 percent.
Transportation stocks continued to benefit from expectations of cross-strait liberalization, resulting in near up-limit gains for China Airlines. Evergreen Marine gained almost 6 percent.
Companies with substantial mainland China investment plans also gained from the market climate, which boosted Uni-President Enterprises by 5.9 percent to NT$13.45 and Formosa Plastic by 5.1 percent. Despite the day’s broadly-based advance dealers noted that it is highly unusual for the market to shrug-off declines in high-tech stocks and that U.S. leads are likely to remain crucial to any sustainable upward momentum.