Taiwan stocks ended up 0.11 percent on Tuesday at their highest close in nearly seven years, shrugging off a drop in Chinese shares, as the island's top electronics parts maker Hon Hai Precision posted solid gains.
Hon Hai surged 3.25 percent after bigger rival Flextronics International said it would buy Solectron for $3.6 billion to cut costs and expand its product line. The main TAIEX index added 9.20 points to 8,303.99, the highest finish since July 19, 2000.
The electronics sub-index rose 0.34 percent. The construction sub-index slid 0.86 percent. "Investors were worried that Taiwan shares might go down with China stocks," said Chris Wang, who manages T$2.7 billion (US $82 million) for Paradigm Asset Management.
Wang said that he bought some PC-related shares based on optimism that tech demand has exceeded investor expectations ahead of the traditional hot season in the second half of the year. Trading was T$134.3 billion (US $4.07 billion), compared with T$116.9 billion on Monday.
China's main stock index traded in a negative zone for much of the day as nervous investors continued to react to last week's hike in the share trading tax. After the Taiwan market closed, however, the main China index turned briefly positive. As of 0618 GMT the index was down 0.31 percent.
Mediatek, Taiwan's top IC design house, fell 2.8 percent to T$520. Smartphone maker High Tech Computer slipped 0.63 percent to T$627. Taiwan Semiconductor Manufacturing Co was 0.14 percent lower. Shares of Hynix Semiconductor jumped on talk that it may sell some of its order memory fabrication lines to TSMC.
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