Stocks stage a comeback after oil prices take a dive; chip foundries up

Stocks had their biggest gain in three weeks after a plunge in oil prices eased concern energy costs will temper economic and corporate profit growth.

The TAIEX added 44.59, or 0.8 percent, to 5,695.56. Futures due next month rose 2 percent to 5,729.

About two stocks gained for every one that fell.

"The biggest fear is high oil prices, so the decline helped alleviate some of the concern among investors," said Mike Shiao (蕭光一), a fund manager at Invesco Taiwan Ltd (景順投信).

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order computer chips, rose 2.6 percent to NT$43.

Rival United Microelectronics Corp (聯電) rose 2.6 percent to NT$19.90. Chief executive Jackson Hu (胡國強) said on Wednesday that "the share price is severely undervalued."

The stock has lost 26 percent of its value since Jan. 1, compared with a 3 percent decline for the TAIEX.

AU Optronics Corp (友達光電), the world's third-largest maker of liquid-crystal displays for computers and televisions, shed 0.3 percent to drop to NT$36.20.

The drop occurred after the company reported on Wednesday that its third-quarter profit unexpectedly fell 18 percent to NT$4.1 billion from a year ago after screen prices tumbled.

The company said it may post a small loss in the fourth quarter.

Hon Hai Precision Industry Co. (鴻海精密), the nation's largest electronics company by sales, rose 0.9 percent to NT$118.50. Chairman Terry Gou (郭台銘) said the company plans to set up a car parts zone in China.