TAIEX rockets past 6,000

Shares leapt to their highest level in more than four months yesterday, tracking steep gains on Wall Street, dealers said.

The TAIEX finished up 132.61 points, or 2.2 percent, at 6,077.96 in dealings valued at NT$147.35 billion (US$4.34 billion).

The benchmark index last finished above the psychological level of 6,000 on May 28, when it ended at 6,137.26.

Advancers far outnumbered decliners 586 to 117, while 123 issues ended the day unchanged.

Index futures for delivery this month climbed 2.7 percent to 6,105.

In the US, the NASDAQ Composite Index rose 2.4 percent on Friday, while the closely watched Philadelphia Semiconductor Index jumped 4.6 percent.

Taiwan shares tend to move in step with US markets due to the close contract manufacturing relationship between companies in both economies.

"Of all sectors, Taiwan's tech stocks have the highest correlation with the US market, which was very bullish on Friday," said Andrew Teng, a manager at Taiwan International Securities.

"The bourse is technically very strong because the session opened 75 points higher today than its last closing level, so depending on how strong the US market continues to be, Taiwan stocks could test 6,200 this week," Teng said.

Shares in Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest contract chipmaker, rose 2.3 percent to NT$45.5 after its American Depositary Receipts rose 5 percent Friday, while rival United Microelectronics Corp (UMC, 聯電) gained 2.4 percent to NT$21.4 after its ADRs added 5 percent Friday.

Chip-related stocks like TSMC and UMC also advanced after JPMorgan Chase & Co analyst Jay Deahna raised his ratings on Applied Materials Inc, the world's biggest maker of chip-production equipment, and Novellus Systems Inc., whose equipment builds circuits in computer chips, citing improving demand in the second quarter of next year.

Powerchip Semiconductor Corp (力晶半導體), the nation's largest maker of dynamic random access memory (DRAM) chips, soared 6.9 percent to NT$27.9. It was boosted by rising DRAM spot market prices, analysts said.

AU Optronics Corp (友達光電), the world's third-largest maker of flat panel displays, was up 3.6 percent at NT$43.5 on a gain of 3 percent in its ADRs.

Financial shares also gave an important boost to the market, on expectations financial firms will hike lending rates this week following the central bank's interest rate hike last week, the first in over four years.

Cathay Financial Holding Co (國泰金控), Taiwan's largest financial group, rose 2.3 percent to NT$67. Fubon Financial Holding Co (富邦金控), the third biggest, gained 4.1 percent to NT$33.20.

First Financial Holding Co (第一金控), which owns one of Taiwan's largest banks, advanced 4.6 percent to NT$27.1.