Taiwan stocks bounced off a 2004 low on Thursday, ending higher as investors snapped up bargains among industrial issues that have been hammered lately, though domestic political worries cast a shadow over market confidence.
The TAIEX share index added 0.95 percent after a volatile session, retreating from intraday gains of as much as 2.5 percent, after Wednesday's 5.4 percent slump.
Sectors like plastics, steel, rubber and cement were among the day's best performers, recovering some lost ground after Chinese Premier Wen Jiabao pledged last week to take strong measures to cool economic growth.
Taiwan's largest steel-maker, China Steel, added 1.37 percent to T$29.6, but was still off the T$32.50 before Wen's comments. Petrochemical heavyweight Formosa Plastics rose 1.09 percent.
"It is a simple rebound after a sharp fall," said Alvin Teng, assistant research manager at SinoPac Securities. "We have cleaned out a lot of the margin calls by now and selling pressure has eased."
Taiwan's technology firms have historically posted their lowest sales of the year in May and June, with little to prod electronics demand before back-to-school sales.
On the political front, President Chen Shui-bian faces a May 10 recount on his slim 0.2 percent re-election victory, which triggered weeks of street protests.
While analysts say the result is unlikely to be reversed, the opposition is still considering staging a protest rally on May 20, the day Chen will be inaugurated.
The market's overall turnover was moderate at T$112.26 billion, steady with T$116.47 billion in Wednesday's session.
The electronics sub-index was one of the day's worst performers despite a 0.91 percent rebound in index heavyweight Taiwan Semiconductor Manufacturing Co compact disc and DVD manufacturer CMC Magnetics surrendered 5.16 percent to close at T$23.90, dropping 24 percent in the past two weeks as investors reconsider the firm's high valuations despite a strong first-quarter profit.
May TAIEX futures jumped 2.17 percent, though the contract remains at a big discount to the spot price after closing at 5,849. The over-the-counter market's TAISDAQ index rose 1.32 percent to close at 134.56.
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