Share prices rose 1.42 percent yesterday to their highest level in five-and-a-half years in active trade on the back of ample liquidity and continued foreign investor interest, dealers said.
They said large-cap stocks led the broad market higher thanks to liquidity-driven buying, while asset-backed stocks extended their rally on interest in firms with major real estate holdings.
The TAIEX rose 102.67 points to 7,345.04, on turnover of NT$175.003 billion (US$5.52 billion).
This was the best finish and marked the first time the market had closed above 7,300 points in more than five years since the 7,391.66 points recorded on Sept. 13, 2000.
Credit Suisse Group, meanwhile, raised its year-end target for the TAIEX to 8,000 points, Nilesh Jasani, the Taipei-based head of research at Credit Suisse, wrote in the note yesterday.
Jasani lifted his forecast for the TAIEX by 9.6 percent from 7,300 previously. The index has gained 12 percent this year.
The financial subindex was one of the star performers, gaining 3.5 percent overall.
Cathay Financial Holding Co (國泰金控), Taiwan's largest financial group by assets, rose 5.7 percent at NT$75.9, while Chinatrust Financial Holding Co (中信金控) rose 6.3 percent to NT$28.
"The financial stocks continued to reflect hopes that the value of assets these companies own will appreciate," said Alex Huang (黃國偉), an assistant vice president at Barits International Securities (倍利國際證券).
Kai Yuan Securities Investment Consultant Co (
He added that short covering had also acted as a catalyst.
"Investors who were empty-handed previously were eager to build up portfolios following the recent upswing," Tang said.
Taiwan Semiconductor Manu-facturing Co (
Rival United Microelectronics Corp (
Shares of Hon Hai Precision Industry Co (
Hon Hai jumped by NT$14.50, or the exchange-imposed limit, to NT$228. Henry King (
Hon Hai's profit in 2007 will grow 31 percent to NT$70.5 billion from an estimated NT$53.7 billion this year, according to a research note released late on Wednesday.