Taiwan stocks end firmer

Taiwan stocks closed up 2.76 percent on Monday, boosted by technology shares such as HTC after China Mobile announced plans to form alliances with the smartphone maker and other Taiwanese technology companies. The main TAIEX share index finished 183.45 points higher at 6,838.25, logging its best single day percentage rise in 2 months after an overnight rally on Wall Street on upbeat housing data and comment from US Federal Reserve Chairman Ben Bernanke.
Turnover was light at T$90 billion ($2.7 billion) compared with Friday's T$103 billion. Smartphone maker HTC gained 1.81 percent after China Mobile, the world's top mobile carrier, said it aims to sign a series of deals with HTC and other Taiwanese technology companies. The electronics sub-index was up 2.39 percent. "The positive outlook on the US economy was the major force behind today's rally," said Michael On, a managing director at Beyond Asset Management.
A surprising rise in home sales and a positive outlook from Bernanke pushed US stocks to new 2009 high. At the Fed's annual conference last week, Bernanke gave his clearest signal yet that the global economy is emerging from a recession. "The rally on Wall Street combined with upbeat economic data at home, such as GDP, lead to a rally among market heavyweights such as Hon Hai," On said.
Electronics parts giant Hon Hai, the second-most active share by turnover, outperformed the main board to climb 4.76 percent after the company said it would work with China Mobile to manufacture e-books. Shares of Mediatek advanced 0.11 percent after news of plans to jointly develop mobile phone chipsets with China Mobile. TSMC and UMC, the world's two largest contract chip makers, were the day's two most active shares by volume. UMC jumped by its 7 percent daily limit and TSMC rose 2.82 percent.
The gains came after a local newspaper said UMC and TSMC were likely to post better-than-expected growth in fourth-quarter sales from the previous three months. However, concern over a possible reshuffle in President Ma Ying-jeou's administration, which has been criticised by the public for being slow in rescue efforts after Typhoon Morakot, could still weigh on the big board.
Shares of Formosa Plastics shot up 4.05 percent after a local newspaper reported that the company would invest $174 million to expand its factory in the Chinese city of Ningbo as demand grows, signalling a possible rebound in the sector. Adding to the main index's gain were financial shares, which recovered from a 7 percent loss over the last week to rise 4.16 percent. Cathay Financial, the island's top listed financial holding firm, gained 5.59 percent.