Taiwan stocks rose 1.31 percent on Monday to a near seven-month closing high, with real estate plays such as Cathay Real Estate climbing after parliament approved a special public spending budget. The main TAIEX share index ended up 75.68 points at 5,857.64, its strongest finish since September 26.
The market has gained about 8 percent over the past three sessions. Turnover was active at T$148.6 billion ($4.4 billion), but lower than Fridays T$160 billion. The construction sub-index was the top winner, ending the session 4.45 percent higher.
Shares of Cathay Real Estate Development, Taiwans leading real estate developer, rose 4.5 percent and rival Farglory jumped by their 7 percent daily limit. "Passage of the budget last Friday helped boost domestic consumption players such as construction shares," said Andrew Deng, a vice president of Taiwan International Securities.
Late on Friday, Taiwans parliament approved a massive T$149.1 billion special public spending budget for 2009 to stimulate the economy and create jobs. Construction shares also got a lift after a newspaper said on Monday life insurance companies could pour money into the real estate market with the expected relaxation of investment limits by the government later this week.
Another big gainer was the automobile sub-index, which rose 4.42 percent on continued hopes Chinas auto subsidies for cars purchased in rural areas could boost sales. However, analysts said there might be profit-taking after recent rallies and cautious investors could stay on the sidelines when major US firms post earning results throughout this week.
TSMC, the worlds top contract chip maker, fell 0.57 percent after its first-quarter sales fell 55 percent, but the result came above forecasts, driven by recent rush orders related to Chinas stimulus package. The broader semiconductor sub-index inched up 0.03 percent while the electronics sub-index rose 1.29 percent.
"Technology shares have been relatively weak because positive sales results have already been factored in," said Deng. Hon Hai, Taiwans largest electronics gear maker, jumped 5.28 percent after its March sales rose 24 percent from a month ago.
Following Hon Hais sales announcement, Goldman Sachs raised its target share price on the parts maker by 18 percent to T$86 from T$73, saying sales could have hit a bottom in the first quarter. In the financial sector, Fubon Financial, Taiwans second-largest insurer, fell 0.19 percent after posting a 36 percent fall in its first-quarter profits. The banking and insurance sub-index finished 0.51 percent higher.
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