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Stocks rise on suspected support by government

Share prices closed 0.94 percent higher yesterday on suspected government support after heavy losses Thursday on speculation that China would impose economic sanctions against Taiwan.

The heavily tech-focused TAIEX closed up 53.44 points at 5,724.89, off a low of 5,630.12 and a high of 5,734.48, on turnover of NT$70.49 billion (US$2.1 billion).

Dealers said that the firmer tone was largely due to the government's support and most investors felt that the situation remains tense and were reluctant to commit funds to the market. Taiwan government said investors should focus on relatively lower price-to-earnings valuations.

"The crisis is far from over. The possibility of the market testing downside support below 5,450 points remains intact," said Michael Hsu (許派一), Jih Sun Securities Investment (日盛投顧) assistant vice president.

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order chips, closed up NT$0.50 at NT$53.50, while rival United Microelectronics Corp (聯電) added NT$0.20 at NT$25.80.

Asian tech shares took heart yesterday from an upbeat earnings forecast from top chip maker Intel Corp, but gave up early gains as an OPEC decision to raise output failed to offset fears over high oil prices.

"The OPEC news came largely in line with expectations," said Yoshihiko Kosuga, an equities manager at Mizuho Investors Securities. "It failed to dispel fears that oil prices could increase again, to US$45 to US$50 per barrel, if geopolitical risks rise in the Middle East," he said.

The Nikkei average was up 0.07 percent at 11,034.24, off an early high of 11,100.73. South Korea's KOSPI was a touch lower, following a 0.42 percent sag on top stock Samsung Electronics.
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