Taiwan stocks rose 0.11 percent to a fresh 18-month closing high on Friday after the central bank kept its interest rates steady, with Nanya Tech and other memory chip makers higher on hopes of a pickup in demand. The main TAIEX share index jumped 9.05 points to 7,972.59, a level not seen since mid-June 2008, finishing the week with a rally of about 3 percent.
Turnover dropped to T$115.6 billion ($3.6 billion) from T$142.5 billion in previous session. "The central bank's decision indicated Taiwan's economy will be recovering at a mild pace, boding well for the main index to extend its momentum above the 8,000 point milestone next week," said Tu Jin-lung, chairman of Grand Cathay Investment Services.
Taiwan's central bank kept its key rates at a record low of 1.25 percent on Thursday and cemented expectations it would stay on hold well into 2010, by noting a lack of inflationary pressure and moderate pace of growth. Nanya Technology, Taiwan's No 2 DRAM chip maker, traded seven-percent limit up, boosting the electronics sub-index by 0.29 percent. Smaller rival Winbond Electronics also traded limit up while Inotera Memory was up 5.4 percent.
The gains come on expectation of improving DRAM demand. DRAM supply is expected to be tight in 2010, following a reining-in of production during the sector's worst slump this year as well as rising demand in emerging markets. Bucking the gains, construction shares sank 1.3 percent after the central bank said it would watch changes in asset prices closely, especially for property in Taipei and two other major cities. Cathay Real Estate fell 0.77 percent and Kingdom Construction slipped 2.6 percent.
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