Taiwan stocks rose 1.72 percent on Monday, as big tech exporters such as Hon Hai led a rebound from a three-week closing low with solid gains on Wall Street and easing oil prices boosting the market. The gain came even after Taiwan said on Friday the island's economic growth logged its slowest pace in more than a year.
The main TAIEX share index closed up 119.08 points at 7,030.72. Turnover was thin, with only T$65.7 billion ($2.1 billion) shares changing hands. "The market jumped after a Wall Street rally. If there's no further negative news, the TAIEX can test 7,350 points this week," said Karen Lin, a fund manager of Paradigm Asset Management Co Ltd.
Helped by gains on Wall Street, electronics parts maker Hon Hai Precision climbed 3.45 percent, lifting the electronics sub-index 1.29 percent. Cathay Financial, Taiwan's No 2 financial holding firm, jumped 3.05 percent. Cathay Financial said on Friday it invested $100 million in a private equity fund of the Blackstone Group LP.
"I don't take this investment as a very exciting news because Blackstone is a company with high risks and its stock prices have been falling," said Michael On, a manager director of Beyond Asset Management. Chinatrust Financial, Taiwan's top credit card issuer, rose 3.05 percent after a report it could invest in a Chinese lender acquired by Morgan Stanley in 2006, as Morgan Stanley will enter Chinatrust's board within two months.
The broader banking and insurance sub-index was up 2.45 percent. On Friday, Taiwan's government posted annual economic growth of 4.32 percent in the second quarter, its weakest zsince the first quarter of 2007, and July jobless rate rose to 3.91 percent from June's 3.88 percent.
"The slower GDP (gross domestic product) rate released last Friday didn't affect the market much because it's a lagging indicator. And it also came within market expectations," said Paradigm's Lin. Formosa Petrochemical, Taiwan's top private oil refiner, rose 0.25 percent after it said on Friday that capital expenditure in 2009 will fall to T$4.0 billion ($127 million) from T$14 billion this year.