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Financial rally pushes TAIEX back above 6,400 points

Local hare prices closed 0.62 percent higher yesterday, led by the financial sector after a better-than-expected offer from Taishin Financial Holding Co (台新金控) for Chang Hwa Commercial Bank (彰化銀行), dealers said.

Bellwether electronics steadied after Friday's declines, helping push the market into positive territory as China plays ran into profit-taking on the gains made on Friday after Beijing's surprise yuan revaluation, they said.

The TAIEX closed 39.72 points higher at 6,420.45, after trading between 6,400.11 and 6,434.45.

Turnover was NT$92.57 billion (US$2.92 billion).

Risers led decliners 498 to 344, with 126 stocks unchanged.

A total of 37 stocks closed limit-up and four limit-down.

The financial sector was up 1.78 percent and electronics rose 0.47 percent while the food sector was down 0.99 percent.

"The Chang Hwa Bank lead was solid enough to jump-start a rally across the financial sector, which in turn, pushed the broad market beyond 6,400 points once again," said Oliver Fang, a Yuanta Core Pacific Securities (元大京華證券) assistant vice president who serves foreign institutions mainly.

He said the market was further supported by bellwether electronics, which steadied after Friday's fall and offset profit-taking in China plays.

Looking ahead, he said select electronics shares may sustain their rebound for some time, while financials may continue to attract investor interest on the Taishin/Chang Hwa Bank lead.

Chang Hwa Bank gained NT$1.30 to NT$19.90, Farmers Bank of China (農民銀行) rose NT$0.70 to NT$10.90 and Taiwan Business Bank (台灣企銀) added NT$0.75 to NT$12.15. All three were limit-up.

Taishin Financial dropped NT$1.10 to NT$26.55 on the view it is paying too high a price for its NT$22.5 percent controlling stake in Chang Hwa Bank.

Shares in Taiwan Semiconductor Manufacturing Co (台積電) eased NT$0.80 to NT$56.10, while United Microelectronics Corp (聯電) was down NT$0.25 at NT$23.55.
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