Share prices closed 0.82 percent higher yesterday, with sentiment boosted by hopes that relations with Beijing will improve following visits by top opposition officials to China, dealers said.
Dealers said Wall Street's gains overnight added to the positive tone.
The TAIEX closed up 46.94 points at 5,805.25, on turnover of NT$53.29 billion (US$1.7 billion). Gains led declines 549 to 301, with 156 stocks unchanged.
Nine stocks closed limit-up, while ten were limit-down.
"The Wall Street lead came at a time when the local bourse was already supported by increasing hopes for an improvement in cross-strait relations," said Tu Jin-lung (
Investors have gradually got over concerns about corporate results.
"The spotlight is now turning to relations between Taipei and Beijing with Lien's trip," Tu said.
While electronics stocks took their lead from their US counterparts, steel and some old-economy stocks benefited from a technical rebound, Tu added.
The New Taiwan dollar, meanwhile, fell for the first day in three on speculation some importers bought US dollars to cover end-of-month payments after the local currency advanced to a one-month high yesterday.
The currency also declined on concern the central bank would sell it to prevent an appreciation from slowing exports.
The NT dollar weakened NT$0.039 to finish at NT$31.413 against its US counterpart, according to Taipei Forex Inc.
The currency on Monday rose NT$0.129 to NT$31.374, its highest close since March 23.
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