Taiwan stocks rose 2.13 percent to a fresh seven-year closing high on Wednesday, led by gains in big technology firms such as TSMC and financial shares after foreign investors recently stepped up buying.
All sectors rose, lifting the main TAIEX 182.24 points higher to end at 8,755.88. The day's rally extended last week's 3.3 percent rise, with turnover spiking to T$199.51 billion ($6.03 billion) from T$151.7 billion in the previous session. The tech-heavy Taipei market was closed on Monday and Tuesday for a national holiday.
"Foreign investors were big buyers so they're buying index heavyweights that have improving corporate fundamentals," said Chiang Chen-sheng, manager at Masterlink Investment Advisory. Optimism over tech demand has pushed up the TAIEX 19 percent since the year's trough hit in early March.
Among major winners, Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chipmaker and foreign fund darling jumped 3.96 percent. Electronics parts maker Hon Hai Precision rose 2.49 percent. Their gains helped lift the electronics sub-index 1.12 percent. The bank and insurance sub-index climbed 4.38 percent ahead of a quarterly board meeting by Taiwan's central bank on Thursday.
After the gains, Chiang did not rule out the TAIEX encountering selling pressure at 8,800 points. Formosa Plastics Corp surged 6.92 percent, its daily limit, after a local newspaper reported that Goldman Sachs had added the company to a list of buy recommendations amid rising raw material costs for plastics. Chip designer Mediatek Inc shed 2.29 percent after a report saying it may cut its third-quarter output, amid inventory adjustments by chip makers.