Share prices closed 0.95 percent higher yesterday in a technical rebound led by the semiconductor and flat-panel screen makers after gains overnight on Wall Street helped steady sentiment, dealers said.
Tourism stocks, however, continued under pressure on continuing concerns about a possible outbreak of bird flu in the region.
The TAIEX rose 53.84 points at 5,748.00 on turnover of NT$86.13 billion (US$2.56 billion).
"The apparent lid on this morning's technical rebound tells you how fragile sentiment is right now," said Oliver Fang, a Yuanta Core Pacific Securities (元大京華證券) assistant vice president who serves mainly foreign investors.
"Only technology bellwethers managed to extend their gains thanks to more convincing earnings records and prospects," he said.
With so many broader concerns still blocking the way, stocks are dependent on Wall Street's lead and how the US dollar fares amid expectations of further US rate hikes over the next two months, he added.
Taiwan Semiconductor Manu-facturing Co (台積電) closed up NT$0.75 at NT$50.30 while rival United Microelectronics Corp (聯電) rose NT$0.35 to NT$19.40.
Nanya Technology Corp (南亞科技) rose NT$0.40 at NT$17.10 after the DRAM maker reported positive results for the third quarter and forecast further improvement in sales in the final quarter.
AU Optronics Corp (友達光電) rose NT$2.25 at NT$38.30, extending gains on the back of foreign investor support.
In tourism-related stocks, Ambassador Hotel (
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