Taiwan stocks closed 3.99 percent higher on Friday, continuing their rally after posting the biggest single-day percentage rise in eight years Thursday, as investors bought into shares after government moves to prop up the market.
The main TAIEX share index closed 187.02 points higher at 4,870.66, after the government implemented a temporary rule change to ease pressure on insurers from losses incurred in the global financial crisis. The surge was further supported by Thursday's decision by the central bank to cut interest rates by 25 basis points, pushing the banking and insurance sub-index up 6.58 percent.
"Warmer cross-strait ties because of Chen Yunlin's (China's top negotiator on Taiwan issues) visit together with China's bank representatives is good news for the industry because it allows for possible growth there," said Parker Wu, an analyst at Shin Kong Investment Trust.
Turnover hit T$86.8 billion ($2.6 billion), the highest level for the month. Leading financial holding companies Cathay Financial, Fubon Financial, Shin Kong Financial and Taishin Financial all closed the day limit-up. Chip giants TSMC and UMC also both closed up the daily limit of 7 percent after a report showed semiconductor sales ticked up in September and after TSMC reported third-quarter earnings in line with market expectations.
Taiwan's top electronic parts maker Hon Hai also closed 3.9 percent higher ahead of its earnings report for the current quarter, which it must release by Friday. LCD makers AU Optronics and Chi Mei Optoelectronics, fighting a bleak industry outlook, struggled for much of the day, though AU ended up 2.25 percent while Chi Mei finished down 1.22 percent.
PC vendor Asustek also bucked the trend, falling 2.16 percent, after it released weaker-than-expected results on Thursday and offered a cautious outlook for the current quarter. The broader electronics sub-index rose 3.48 percent.
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