Taiwan stocks ended up 0.77 percent on Wednesday from a near three-year low, with TSMC leading the rise on Wall Street gains and after the Taiwan central bank's surprise cut of the reserve requirement ratio to boost liquidity. The main TAIEX share index rose more than 4 percent minutes after the open but quickly gave up much of its gains as battered banking shares struggled.
The financial sub-index fell 1.23 percent, adding to a 13.5 percent tumble over the last two sessions. The TAIEX closed up 44.28 points at 5,800.87, after closing at its lowest level in nearly three years the previous session. The rise ended a 9 percent slump over the past two days. Turnover was active at T$102.7 billion ($3.2 billion), up from Tuesday's T$82.4 billion.
"The central bank's measure and the Wall Street gain helped the market rise, but investors were cautious and quickly locked in their profit from the sharp gain in the early trade," said Michael On, a managing director of Beyond Asset Management.
Taiwan's central bank said late on Tuesday it will cut its reserve requirement ratios, as it seeks to increase liquidity in the banking system during a crisis of confidence after Lehman Brothers declared bankruptcy. Taiwan Semiconductor Manufacturing Co (TSMC), the world's leading contract chip maker, jumped 3.73 percent, and Hon Hai Precision, Taiwan's top electronics parts maker, gained 3.96 percent. The electronics sub-index climbed 1.57 percent.
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