Taiwan stocks rose 0.4 percent on Wednesday to a new 10-week closing high, led by a surge in smartphone maker HTC Corp whose first-quarter profit exceeded its own expectations. The buying spread to small-cap cellphone parts makers who are also riding growing demand for new handsets jammed with features, but analysts said selling on the big board could emerge soon after a 13 percent rally since early February.
"We all know that corporate March sales are pretty good and that has been priced in," said Bevan Yeh, a fund manager at Prudential Financial Securities Investment Trust. "People might turn cautious before more companies report their quarterly earnings by the end of this month."
HTC shares rose as much as 7 percent, their daily maximum, before ending up 5.5 percent. It reported after the market closed on Tuesday that March sales rose 33 percent from a year earlier. The main TAIEX share index closed up 32.13 points at 8,121.78.
"HTC's strategy to sell more new, cheaper models is starting to pay off and there should be more upside for the stock," said Andrew Deng, analyst at Taiwan International Securities. But Deng said the TAIEX could encounter selling pressure when it reaches 8,200 points. Ichia, a supplier of handset keypads, rose 2 percent and touch-panel maker Young Fast jumped 2.1 percent.
The electronics sub-index gained 0.2 percent and the financial sector edged up 0.35 percent. Improving corporate fundamentals have attracted buying from foreign investors, who had bought T$42.3 billion ($1.3 billion) worth of local shares this month as of Tuesday.
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