Stocks closed higher yesterday, with airlines and liquid-crystal-display (LCD) screen makers leading gains.
Makers of LCD screens and chips rose after better-than-expected fourth-quarter profit from Samsung Electronics spurred buying in the tech sector, dealers said.
Airline stocks soared after negotiators from Taiwan and China agreed on direct flights over the Lunar New Year holiday.
The TAIEX finished 55.75 points higher, or 1 percent, at 5,945.27. Advancing issues outnumbered decliners 496 to 247, while 162 issues ended the day unchanged.
The local currency also rose on speculation investors abroad are increasing purchases of the nation's shares.
The NT dollar had its highest close in more than four years. The unit rose NT$0.215, or 0.7 percent, to NT$31.804 against its US counterpart in Taipei, its largest advance since Nov. 18 and strongest close since Oct. 12, 2000.
Overseas investors bought a net US$1.2 billion of Taiwanese equities, according to Taiwan Stock Exchange figures.
"The stock market is cheering the accord on China-Taiwan flights, so that will help strengthen the New Taiwan dollar," said Gary Huang, a currency trader in Taipei at Union Bank of Taiwan (聯邦銀行).
AU Optronics Corp (友達光電), the nation's largest LCD screen maker, rose 5.2 percent to NT$44.2, while Chi Mei Optoelectronics Corp (奇美電子) jumped 4.9 percent to NT$40.70.