Taiwan stocks closed at a fresh six-week high on Thursday, as a Wall Street rally spurred hopes about a better outlook for technology companies like TSMC that count the United States as their biggest market.
The main TAIEX share index rose 0.55 percent to 6,733.46 points, slightly below the 6,734.51 level on July 4. So far this week, the index has gained 2.45 percent.
Among the most active, the heavyweight electronics sub-index rose 1.09 percent and the tourism sub-index shot up 3.03 percent.
Trading topped the T$100 billion landmark for a second day, at T$118.9 billion (US $3.6 billion). "Institutional investors have been buying Taiwan stocks as they were encouraged by the strong gains on Wall Street recently," said Victor Liu, an assistant vice president at Prudential Financial with T$90 billion client assets under management. Liu expected the main index to gather more steam to hit 7,000 points in the fourth quarter.
The tech-heavy Nasdaq Composite Index had its two best days of trading in three years on Tuesday and Wednesday for a combined gain of 3.89 percent. The rally on Wall Street came as investors interpreted a tame increase in core consumer prices to mean the Federal Reserve will keep interest rates unchanged in the short term.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chip maker, ended up 1.19 percent. Smaller rival United Microelectronics Corp (UMC) jumped 2.13 percent. TSMC chairman Morris Chang said on Wednesday he expected the company's 2006 sales to grow by close to 20 percent.
Hon Hai Precision Industry Co, Taiwan's top electronics components maker and a major supplier of US technology firms, soared the daily 7 percent limit after going ex-dividend on Thursday. That means investors who held Hon Hai before today received 200 shares and T$3,000 for every 1,000 shares held.