Taiwan stocks surge

Taiwan stocks rose 0.31 percent on Wednesday as investors snapped up beaten-down financials after recent heavy sell-offs triggered by concerns over swine flu. The main TAIEX share index closed up 17.33 points at 5,614.06, rebounding from a near three-week low the previous session. Turnover was active at T$112.5 billion ($3.3 billion), lower than T$126.9 billion on Tuesday.
Sentiment rose on news that China had established rules allowing its companies to invest in Taiwan from May 1, an important step in unleashing potentially vast financial flows across the Taiwan Strait. The financial sub-index was up 1.23 percent following a 7 percent drop over the past two days. Cathay Financial, the island's largest listed financial holding firm, ended 0.29 percent higher.
Bank of China has said it expects to be the first mainland bank to enter the Taiwan market. China Airlines rose 6.3 percent, following a 13 percent drop over the previous two sessions, while EVA Airways rose 2.22 percent. The transportation sub-index rose 1.08 percent, recouping some losses early in the session.
But the tourism sub-index continued to decline on flu worries, closing the session 3.67 percent lower. Hotel chain operator Leofoo Development was down 6.12 percent. Shares of UMC, the world's No 2 contract chip maker, were up 3.57 percent before saying that it expected to return to profit in the second quarter. PC vendor Acer fell 0.17 percent. After the market close, the firm said its net profit fell 31.4 percent, missing market expectations.
Chip designer Mediatek fell 1.83 percent. The firm posted a better-than-expected net profit in the first quarter after market close. Shares of Quanta, the world's top contract notebook PC maker, declined 0.57 percent while cross-town rival Compal gained 1.15 percent.
UMC's larger rival TSMC rose 1.18 percent after a newspaper said it had revised its forecast for the global semiconductor industry this year to a 20 percent decline from a 30 percent slide previously, largely due to orders from China.