Taiwan stocks rose 2 percent on Monday to a 7-year closing high, as foreign investors bought technology exporters such as Mediatek and TSMC following gains on Wall Street. The main TAIEX share index closed 181.53 points higher at 9,369.84. Turnover spiked to T$227 billion ($7 billion) from T$210.72 billion in the previous session.
The semiconductor sub-index rose 2.46 percent and the bank and insurance index advanced 3.59 percent. "We estimate that there will still be around T$2 trillion worth of foreign funds which will enter the domestic market in the next few months, but the market could see pressure at 9,500 points," said Chiang Cheng-sheng, manager at Masterlink Investment Advisory.
High-priced issues such as chip designer Mediatek Inc rose 5.07 percent and Taiwan Semiconductor Manufacturing Co Ltd (TSMC) gained 2.13 percent after US shares climbed in the previous session on rising oil prices. Shares of Pan Overseas rallied the daily 7 percent maximum after local media said a US firm planned to form a WiMax-related company with the Taiwan firm.
Pan Overseas Corp rose the daily 7 percent maximum after the Chinese-language Commercial Times reported that the Taiwan firm planned to partner Clearwire Corp to form a new company, but no specific details were given. Mega Securities manager Cliff Chuang expects the main index to trade between 9,200 and 9,400 points this week.
United Microelectronics Corp (UMC) closed up 0.24 percent. UMC reported a small fall in June sales minutes after the market closed. A slew of major technology companies in Taiwan, including TSMC, UMC's larger rival, are set to report their second-quarter earnings in late July. They will also give guidance for the third quarter.
Cheng Uei Precision, a firm under Taiwan's top electronics maker Hon Hai Precision Industry Co, gained 3.59 percent after the Economic Daily News reported that Cheng Uei and chip design house C-Media Electronics Inc plan to enter China's mobile phone market. The company will unveil its new Kuro mobile phone in Beijing on Monday, it said. Shares of C-Media declined 1.77 percent.