TAIEX ends slightly higher in wake of Wall Street rally

Shares ended slightly higher yesterday after late-session profit-taking erased nearly all the early gains inspired by Wall Street's rally overnight.

The TAIEX finished just 4.03 points, or 0.1 percent, higher at 5,721.31, on turnover of NT$66.01 billion (US$1.95 billion).

The index rose 1.5 percent in the morning to an intraday high of 5,803.67 after a 1.7 percent gain in the Dow Jones industrial average. But profit-taking then set in.

The NT dollar recovered from a one-year low as local stocks rebounded. The local currency rose NT$0.029 to close at NT$33.741 against the US dollar, on turnover of US$656 million on the Taipei foreign exchange market.

"Investors aren't confident about the market," said, Huang Hsiun-hui, an analyst at Capital Securities (群益證券). "They believe many companies' first-quarter [of 2006] profit growth may not be strong."

The third and fourth quarters are peak periods for the nation's exporters as global demand rises ahead of the Christmas and New Year holiday seasons, but demand is expected to fall in the first quarter, he said.

Solomon Chang, manager at Yuanta Core Pacific Securities (元大京華證券), said investors will continue to view Taiwan shares as poorer investments than US stocks in the near term.

"The interest-rate gap between Taiwan and the US is still widening, and a weaker Taiwan dollar is making foreign investors more reluctant to buy Taiwan stocks," Chang said.

The market's focus yesterday was on large technology companies scheduled to issue their third-quarter earnings this week.