Taiwan stocks closed up 1.57 percent on Wednesday, with tech heavyweights like UMC leading a rebound from a near one-year low after Federal Reserve Chairman Alan Greenspan said US economic growth remains solid.
The main TAIEX jumped more than two percent before ending up 83.45 points at 5,409.13. The day's rise recouped half of Tuesday's 3 percent decline that was sparked by a Merrill Lynch downgrade on AU Optronics.
United Microelectronics Corp (UMC), the world's second-largest contract chipmaker, rose 3.33 percent to T$21.70, and AU, the market's most active issue, gained 0.73 percent to T$41.40 after slumping the daily seven percent on Tuesday.
AU shares have still fallen about a fifth after Deutsche Bank downgraded it and local rival Chi Mei Optoelectronics in early June.
Among other major winners, microchip designer VIA Tech went limit-up to T$25.10 and memory chipmaker ProMOS Tech was up 4.35 percent at T$16.80 after returning to profits in the first half from a year ago.
Turnover on the exchange was flat with Tuesday's at T$64.24 billion, but sentiment was boosted after Finance Minister Lin Chuan denied late on Tuesday reports that he was preparing to reinstate a controversial stock capital gains tax.
The over-the-counter TAISDAQ index rose 2.20 percent to 110.95, while July TAIEX futures edged up 2.19 percent to finish at 5,416.
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