Optimism in US markets boosts domestic shares

Shares ended higher yesterday after gains in the US market overnight, led by two of the world's largest contract chipmakers, analysts said.

The TAIEX finished 79.88 points, or 1.4 percent, higher at 5,970.71. Dealings were valued at NT$74.63 billion (US$2.38 billion).

Decliners well outnumbered advancers 583 to 257, while 185 issues ended the day unchanged.

"The Taiwan bourse was boosted by the US market, but it underperformed Japan and Korea's over 2 percent rally because trade wasn't heavy enough," said Alex Liu (劉懋楠), an assistant vice president at Taiwan International Securities (金鼎證券).

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest maker of made-to-order chips, soared 2.7 percent to NT$56.4 after its American Depositary Receipts (ADRs) rose 1 percent overnight.

Smaller rival United Microelectronics Corp (UMC, 聯電) added 1.5 percent to NT$20.4 after a 1.7 percent jump in its ADRs.

Together, TSMC and UMC account for around 13 percent of the capitalization of the Taiwan stock market.

Makers of liquid-crystal-display (LCD) panels also rose.

AU Optronics Corp (友達光電), the world's third-largest LCD maker, climbed 2.6 percent to NT$52.3, while smaller peer Chi Mei Optoelectronics Corp (奇美電子) was up 2.4 percent at NT$50.70. Chunghwa Picture Tubes Ltd (中華映管) added 1.9 percent to NT$13.60.

Continued buying by foreign investors may help the index overcome the psychological barrier of 6,000 today, Liu said. Next week, the bourse is likely to consolidate between 5,900 and 6,050, he added.