Stock index favors bricks and mortar, edges up 18 points

Shares rose slightly yesterday as investors were encouraged by gains overnight on Wall Street.

Companies with substantial property holdings extended defensive gains while some large-cap electronic stocks lost ground on continuing uncertainties about the industry outlook, dealers said.

The TAIEX rose 17.86 points, or 0.26 percent, to 6,879.51. Turn-over was NT$126.72 billion (US$3.95 billion). For the week, the index was down 194.64 points or 2.75 percent.

The construction sector, the best-performing sector on the main board, rose 3.2 percent overall yesterday.

"Local investors have been avoiding technology plays recently, and turned to construction stocks," said Bill Huang, a trader at KGI Securities Co (中信證券). The second quarter is usually a slow period for technology firms.

Kindom Construction Corp (冠德) surged by the 7 percent daily limit to NT$10.8, and Huaku Construction Corp (華固) rose 5.3 percent to NT$69.4.

However, technology companies mostly fell. AU Optronics Corp (友達光電), the world's third-largest flat-panel maker by revenue, lost 2.1 percent at NT$46.5, and rival Chi Mei Optoelectronics Corp (奇美電子) fell 3.3 percent to NT$37.7.

Traders said flat-panel makers were facing inventory buildups and pressure for lower prices in the second and third quarters.

LCD-component maker Wellypower Optronics (威力盟) fell by the daily limit of 7 percent to NT$172.5, and Radiant Opto-Electronics (瑞儀光電) lost 4.4 percent to NT$61.6.

CTCI Corp (中鼎) closed at NT$18.55 after Morgan Stanley Private Equity acquired a 19.9 percent stake in the company.