The China Post news staff and CNA
Taiwan stocks clinched a four-day winning streak yesterday, while the New Taiwan dollar surged, as investors became more upbeat over the economy of Taiwan as well as the rest of the world. Taiwan share prices rose further yesterday amid improved sentiment after China, the United States and Germany reported expansion in their manufacturing activities, dealers said.
The improved production data allowed investors to leave behind concerns over the debt problems in the eurozone, at least for now, and add large-cap stocks to their portfolios to vault the index past the 7,600 point mark, they said.
The weighted index closed up 103.25 points or 1.36 percent at the day’s high of 7,652.46, off an early low of 7,578.76, on turnover of NT$166.27 billion.
The market opened up 0.97 percent on the back of gains posted on Wall Street and several major European markets overnight as investors hailed the global increase in manufacturing activity, the dealers said. Buying extended from small stocks, such as solar energy firms, to high-tech heavyweights, including smartphone maker HTC and cellphone camera lens supplier Largan Precision, and the old economy sector as institutional investors kept rebuilding their portfolios, pushing the index to the highest level for the day, they said.
“Many investors sought positive leads to buy at a time when they came back to the market after the New Year holiday,” Concord Securities analyst Kerry Huang said. “The better-than-expected manufacturing data simply served as a catalyst for the buying.” With the 100-point TAIEX rise, the local currency also rose as foreign investors wired an overwhelming amount of funds into the island. The local currency closed at NT$29.55, up NT$0.145 from the previous session, on trade volume of US$1.087 billion. The New Taiwan dollar’s rising trend began in the morning, in keeping with an appreciation of non-U.S. currencies such as the euro and the Korean won. With the rally in the stock market, the local currency had at one point surged past NT$29.5 to NT$29.45, up NT$0.245. The drastic increase was due partially to active purchases of local stocks by foreign investors, who posted a net purchase of NT$6.713 billion in yesterday’s stock trading. The figure added to the net sale of NT$370 million by investment trusts and net buy of NT$1.676 billion by securities firms to contribute to a total net purchase of NT$8.019 billion by the island’s three institutional investors. Yet, soon after the local currency reached NT$29.45, importers entered the market to get the cheapened U.S. dollar. Their move helped drag down the local currency, which eventually closed at NT$29.55.