Lifted by TSMC, TAIEX records a 42-month high

Stocks rose to their highest in nearly 42 months yesterday, led by exporters such as Taiwan Semiconductor Manufacturing Corp (TSMC, 台積電) and AU Optronics Corp (友達光電), after a report showed the US economy grew faster than the government estimated.

The TAIEX gained for a fourth day, jumping 137.89, or 2 percent, to 6,888.43. Taiex Futures for March delivery added 2.4 percent to 6,968.

About six stocks gained for every five that declined. Shares worth NT$233.5 billion (US$7 billion) traded, the highest since April 11, 2000.

The US economy expanded at a 4.1 percent annual pace in the fourth quarter as companies rebuilt inventories, the US Commerce Department said on Friday.

Gains on Asian bourses, including Hong Kong and Japan, added to the local market's upward momentum. Shares also gained after a weekend election rally ended peacefully, easing some investors' worry that the demonstration could turn violent.

"Having a peaceful demonstration with more than 1 million people showed the election can be carried out with no violence," said Mike Shiao, who manages US$45 million at Invesco Taiwan Ltd (景順投信).

"Taiwan stocks will move according to the fundamentals, regardless of the outcome of the election," he said.

TSMC, which counts on the US for more than three-quarters of its sales, rose NT$1, or 1.6 percent, to NT$64.50. Rival United Microelectronics Corp (聯電) gained 2.6 percent to NT$31.2.

Hua Nan Financial Holdings Co (華南金控) gained NT$1.60, or 5.1 percent, to NT$32.90 after a Chinese-language newspaper reported it is interested in merging with First Financial Holding Co (第一金控) to become the nation's largest lender by assets.

First Financial rose NT$1.90, or 6.9 percent, to NT$29.50.