Taiwan stocks rose 1.18 percent on Tuesday to a more than eight-month closing high after a Wall Street rally sparked hopes the global recession is easing, boosting financial shares such as Cathay Financial. The main TAIEX index rose to as high as 6,784.26 points early in the session but later pared gains as investors grew wary of the market's momentum following recent advances.
The TAIEX closed up 77.78 points at 6,655.59, its strongest finish since September 8. Turnover was hefty at T$218.8 billion ($6.7 billion), rising from T$166.5 billion a day earlier. The banking and insurance sub-index, the day's winner among sub-indexes, jumped 3.6 percent, following a 7.5 percent jump by US banking shares.
Cathay Financial, Taiwan's largest listed financial holding firm and the most active stock by turnover, jumped 5.16 percent. Chinatrust Financial, the island's No 1 credit card issuer, advanced 1.22 percent. "The rally on Wall Street and positive news on cross-Strait ties fueled today's gains," said Robert Hsieh, a vice president of Shin Kong Investment Trust.
A group of Chinese firms, including Lenovo Group and Qingdao Haier, are expected to buy up to $10 billion worth of products from Taiwan, local media reported on Tuesday, the latest signs of improving ties with China. The TAIEX has risen 45 percent so far this year, making it one of the top performers in major global markets, as investors bet warming ties with economic powerhouse China could help the island's recession-hit economy.
The electronics sub-index rose 1.2 percent. Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chip maker, gained 1.79 percent, following a 5.29 percent surge in its ADRs in New York trading. TSMC's smaller rival United Microelectronics Corp (UMC) was up 1.49 percent.
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