Taiwan stocks rose 0.72 percent on Wednesday to a near nine-month closing high, with financial shares like Mega up on hopes of potential Chinese investments, but the gain was limited by concerns over a flu outbreak. The main TAIEX share index closed 48.03 points higher at 6,703.62, its best finish since September 1, 2008, and the fourth consecutive gaining session.
The index was in negative territory early in the day after Taiwan reported its first confirmed H1N1 flu case. Turnover was active at T$191.6 billion ($5.8 billion), but lower than Tuesday's T$218.8 billion. "The death rate of H1N1 virus is quite low and the virus is curable, so its impact on the market should be smaller than Sars," said Bevan Yeh, a senior fund manager of Prudential Financial Securities.
"Japan's market is another indicator. There are much more flu cases in Japan, but the impact on its stock market didn't last too long." The transportation sub-index fell 0.28 percent, with China Airlines and Eva Airways down 2.47 percent and 1.46 percent, respectively. "Fears that the market would fall on the President's anniversary and concerns on the flu outbreak weighed on the market for a short while during the session," said John Chiu, a vice president of Fuh Hwa Securities Investment Trust.
In previous years, concerns that the market would track previous slides on the President's anniversary prompted some investors to stay on the sidelines. "But news on Chinese investments and other Chinese procurement plans in Taiwan helped push up the market."
Taiwan will allow Chinese investors to take a stake in local state-run banks by buying their shares in the market, local media reported on Wednesday. Chinese Minister of Commerce Chen Deming will lead a 1,000-person delegation to visit Taiwan for product procurement in June, making him the highest-ranking official to visit the island, a local newspaper reported on Wednesday.
The banking and insurance sub-index was up 2.2 percent. Mega Financial jumped limit-up and First Financial rose 2.94 percent. Shin Kong Financial, parent of Taiwan's No 3 life insurer, rose 4.6 percent after saying on Tuesday it expects 30 million Chinese yuan of insurance premiums this year as it opens business in China.
Tech and auto shares also rose after China said it would expand an existing subsidy scheme to encourage the purchase of new vehicles and home appliances to boost domestic spending, with Taiwan's electronics and auto parts makers likely to benefit. The electronics sub-index rose 0.65 percent, with chip designer Mediatek up 1.51 percent. The automobile sub-index advanced 0.66 percent.
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