Stocks gained yesterday, led by companies being added to the Morgan Stanley Capital Interna-tional Emerging Markets Index such as Chi Mei Optoelectronics Corp (奇美電子), Quanta Display Inc (廣輝電子) and Shin Kong Financial Holdings Co (新光金控).
The TAIEX added 72.43, or 1.2 percent, to 5,958.79. About 10 stocks gained for every one that fell. Taiex futures due in May rose 1.4 percent to 5,942.
"The MSCI decision is a much needed boost to investor confidence," said Tracy Chen, a fund manager at Prudential Securities Investment Trust Co (
It's "good news at last after talks about interest rate hikes and China's economic cool down," she said.
Chi Mei Optoelectronics rose 5.5 percent to NT$67.50. Shin Kong Financial rose 1.5 percent to NT$27.70. Quanta Display rose 5.3 percent to NT$25.70.
Taiwanese companies account for 11 of the stocks joining MSCI indexes, the second biggest in Asia. The changes take effect at the close of trading May 28, MSCI said in announcing its annual review of the indexes' members.
Dealers said the positive lead from Wall Street overnight and MSCI's announcement enabled the market to extend its technical bounce. However, profit-taking and stop-loss selling emerged in late trade to cap the early gains, they said.
"It was simply a technical rebound," said Michael Hsu (許派一), an assistant vice president with Jih Sun Securities Investment Consulting Co (日盛投顧).
"Those stocks which suffered a significant correction previously led the recovery Wednesday, while some bellwether electronics lost steam given [fragile] market confidence," he said.
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