Taiwan stocks rose 4.26 percent on Thursday to an over two-week closing high, as gains on Wall Street fuelled widespread buying, with Hon Hai leading the rally after J.P. Morgan upgraded its rating on the gear maker. The main TAIEX share index ended up 181.95 points at 4,453.75, gaining for a third session and posting its highest close since November 12.
Turnover was light at T$62 billion ($1.9 billion), but higher than T$45 billion a day earlier. "The market has dropped a lot for a long time (so) it's likely that its rebound in recent sessions will be sustained and that it will rise to as high as 5,500 points near the end of the year," said Nigel Lee, a portfolio manager of National Investment Trust.
Lee expected the market to trade between 4,300-4,600 points next week. Shares of Hon Hai Precision, Taiwan's largest electronics parts maker, surged by their 7 percent daily limit after J.P. Morgan upgraded the Taiwan firm to "neutral" from "underweight" on Thursday. Acer, the world's No 3 PC seller, and smaller rival Asustek jumped 3.74 percent and 4.54 percent, respectively, tracking a US rally and ignoring a Morgan Stanley target price cut due to a dismal demand outlook.
The electronics sub-index gained 4.55 percent. DRAM chip makers also outperformed, with Inotera Memories and Powerchip both going limit-up. Inotera rallied for a second day after the company and sister firm Nan Ya Plastics said they would lend a combined $285 million to struggling US DRAM maker Micron Technologies.
Powerchip also got a boost from news that Japanese computer memory maker Elpida Memory had decided to lift its stake in its joint venture with Powerchip. Smartphone maker HTC Corp surged 6.03 percent, despite Citi cutting its 2009 earnings forecast for the Taiwan company.
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