Taiwan stocks extend gains, helped by US rises

Taiwan stocks closed slightly firmer on Friday, staying at their highest level in over 13 months as investors followed gains on Wall Street and grew increasingly confident about a recovery in the tech industry. The main TAIEX share index rose as much as 1.2 percent before late profit-taking erased most of those gains. It ended up 0.18 percent at 6,293.56 points, helped by a 0.29 percent rise on the electronics sector.
The day's gains followed a 0.48 percent rise on Thursday, with turnover spiking to T$111.06 billion ($3.54 billion), the highest in 3-1/2 months, from T$82.16 billion on Thursday.
"Downside should be limited even though the market pulled back. If you are a long-term investor, don't worry because we don't see much negative news from the US or the tech industry now," said Tao Chih-wei, deputy manager of institutional investor division at Fubon Securities.
United Microelectronics Corp (UMC) the world's second-largest contract chip maker, gained 2.58 percent to T$23.85 after its ADRs shot up 4.01 percent in the United States on Thursday.
Domestic fund managers were seen hunting for bargains to boost performance before closing there second quarter books. Small-cap firms with better fundamentals were among their targets, analysts said. For example, MiTAC Technology Corp, a second-tier maker of laptop PCs, jumped 6.07 percent to T$27.10.
Mica has said it expects 2005 shipments to rise as much as 50 percent from last year as the appetite for consumer models grow. But display screen makers gave up gains that were inspired by hopes of rising demand.
Chunghwa Picture Tubes Ltd, the market's most active issue in terms of volume, fell 0.68 percent to T$14.70 and smaller rival HannStar Display Corp was off 1.79 percent at T$11.
Cyclical, such as steel, plastics and textile shares, also rebounded on Friday. They had been falling in the past several months following weak raw material prices.
The island's top steel producer, China Steel Corp, rose 0.47 percent to T$31.85 and Formosa Plastics Corp.
Finished up 1.07 percent at T$56.50. In the United States, the Dow Jones rose 0.12 percent to its highest close since mid-March and the Nasdaq jumped 0.69 percent on Thursday.
The over-the-counter market's TAISDAQ index edged 0.11 percent lower to close at 121.94, while July TAIEX index futures rose 0.15 percent to 6,189.