Taiwan stocks climbed 2.89 percent to their best percentage gain in more than five months on Tuesday, boosted by a plan for a capital gains tax by the ruling KMT Party that favours investors more than an earlier proposal put forward by cabinet. The main TAIEX index ended up 206.29 points or 2.89 percent at 7,342.29, its biggest one-day percentage rally since December 21.
The auto sector was the top winner, surging 6.75 percent. The heavily weighted electronics and financials sub-indexes were both up about 3 percent. Under the proposal by KMT, which has a slight majority in the cabinet, investors have the choice of paying the tax when the market trades above 8,500 points or they can add their stock trading profits to their annual income, a KMT lawmaker said. The plan prompted the finance minister to resign on Tuesday. The Taiwan dollar climbed slightly to T$29.614. Foreign investors were net sellers on Monday, bringing their total selling this month to T$100.65 billion.