Stocks, TWD both surge on investor optimism


CNA

TAIPEI–Taiwan share prices closed 1.7 percent higher yesterday and breached the 8,300-point level for the first time since Jan. 18, benefiting from a rebound in the high-tech sector amid optimism over demand from China, dealers said.

The weighted index rose 138.92 points to 8,306.98, after moving between 8,199.49 and 8,307.59, on turnover of NT$127.10 billion.

The market opened up 0.44 percent, and the momentum accelerated as investors expected that growing demand for electronics products in China would offset slowing sales in the United States and Europe, dealers said.

The buying also spilled over to the old economy sector and financial stocks as the market found itself awash in liquidity, they said.

A total of 2,696 stocks closed up and 1,361 finished down, with 306 stocks remaining unchanged. All eight major sectors ended higher.

The plastics and chemical sector scored the biggest gains, rising 2.07 percent. Paper and pulp shares added 1.78 percent, machinery and electronics stocks rose 1.75 percent, financial shares added 1.49 percent and construction stocks closed up 0.85 percent.

Foodstuff issues rose 0.41 percent, cement stocks gained 0.34 percent, and the textile sector closed up 0.23 percent.

Taiwan International Securities analyst Michael Chiang said market sentiment improved after the local media reported Monday morning that China’s prolonged Oct. 1 National Day holiday had ignited a buying spree, significantly lowering the inventories of high-tech products there.

“The inventory adjustments are expected to increase product shipments in the fourth quarter,” Chiang said. “That’s why investors turned upbeat.”

In the currency market, the U.S. dollar fell against the New Taiwan dollar yesterday, dropping NT$0.18 to close at NT$30.730.

Turnover totaled US$740 million during the trading session.

The greenback opened at the day’s high of NT$30.910 and moved to a low of NT$30.595 before rebounding.

Dealers said the appreciation of other Asian currencies in regional markets helped spur gains in the Taiwan dollar against the U.S. dollar.

Anticipation that the U.S. would continue to loosen its monetary policy to stimulate its economy has led to expectations that the value of the greenback will be pulled down further, they said.