Taiwan stocks edged to their highest close in over 13 months on Monday as record high oil prices fuelled plastics and petrochemical issues like Formosa Plastics, while selected tech issues also rose. The TAIEX share index ended up 0.05 percent at 6,296.89, and has gained 10.6 percent from a 2005 low hit two months ago. "This is actually quite a strong showing," said Alex Huang, a vice president at Barits International Securities.
"Higher oil prices should have pulled the index lower, but oil-related companies rose and investors are gaining confidence in the electronics industry's recovery," he said.
Formosa Plastics Corp, the world's number two PVC producer, topped the most active list, added 2.48 percent to T$57.90, helping the plastics index rise 1.47 percent to far outperform the broader market.
China Petrochemical added 1.65 percent to T$8.65, boosting the petrochemical index up by 1.25 percent.
While higher prices for crude oil feedstock tend to crimp profit margins for petrochemical producers, investors believe demand is strong enough that Taiwan firms will be able to pass on higher prices to customers.
Taiwan relies on imports for all of its energy needs, and low turnover of only T$65.2 billion ($2.08 billion), the lowest in three weeks, showed that investors were concerned about the dangers of rising energy bills, said analysts.
However, gains in small electronic niche players could only budge the bellwether electronics index up 0.07 percent.
Compeq Manufacturing Co Ltd, a supplier of printed circuit boards for cellphones, jumped 3.28 percent to T$12.60, while Lite-on Technology Corp, a peripherals maker, gained 3 percent to T$37.80.
Investors took quick profits in compact disc maker Ritek Corp, which ended down 1.16 percent at T$12.80, after rising as much as 1.54 percent earlier in the session.
Analysts said the main index could be in for one or two weeks of consolidation as tough technical resistance lies at the 6,400-point level.
Big chip makers continued to rise as foreigners have been building their positions in these blue chips over the past several weeks of trade.
United Microelectronics Corp, the world's number two contract maker of semiconductors, jumped 2.73 percent to T$24.50, while larger rival Taiwan Semiconductor Manufacturing Co edge up 0.18 percent to T$56.90.
TSMC has gained almost 19 percent over the past two months.
In the United States, the Dow Jones rose 0.42 percent on oil and metal companies and the Nasdaq added 0.05 percent on Friday.
The over-the-counter market's TAISDAQ index gained 0.64 percent to close at 122.72, while July TAIEX futures index lost 0.02 percent to 6,188.
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