Stocks rose for the first day in three yesterday. Formosa Plastics Corp (台塑) gained after raising its pretax profit forecast for this year by half because a recovering global economy is driving up prices of petrochemical products.
The TAIEX added 85.26, or 1.6 percent, to 5,427.75, after falling as much as 0.8 percent. Index futures for this month rose 1.6 percent to 5,423.
"News about rising demand for plastics products and memory chips signal that the second-half outlook is not that bad," said Maggie Chien, who helps manage the equivalent of US$30 million at Capital Investment Management Co (群益投信).
Formosa Plastics added 4.3 percent to NT$48.60. The company increased its 2004 pretax profit forecast to NT$30 billion (US$878 million) from NT$20.1 billion.
Chipmakers such as Powerchip Semiconductor Corp (力晶半導體) gained after Dramexchange.com, a Taiwan-based marketplace for chipmakers, said spot prices for chips may climb in the coming week on increasing demand from makers of notebook computers and European customers. Powerchip jumped 5.6 percent to NT$20.90.
Chi Mei Optoelectronics Corp (奇美電子), the nation's second-largest maker of flat-panel displays, jumped the daily 7 percent limit to NT$42.10 on news that smaller rival HannStar Display Corp (瀚宇彩晶) is seeking Chi Mei Optoelectronics for a strategic alliance. Chi Mei swiftly denied the news.
Elitegroup Computer Systems Co (精英電腦), a computer motherboard maker, tumbled the daily 7 percent limit to NT$12.50 after the company forecasts it will make a loss this year, compared with a previously expected profit.
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