TAIEX closes up 1.8 percent on a technical rebound

Shares rebounded yesterday after plunging earlier this week on uncertainties about the domestic political situation and the outlook for the US economy.

The TAIEX gained 112.82 points, or 1.79 percent, to 6,444.63 yesterday, but ended 7.4 percent lower for the week as a whole.

Turnover reached NT$118.61 billion (US$3.65 billion) yesterday, down from NT$119.25 billion the previous day.

The benchmark index plunged 627.83 points, or 9 percent, in the previous four sessions, as markets fell globally on concerns US growth may stall on higher interest rates and lower US demand.

Domestically, an opposition campaign to oust President Chen Shui-bian (陳水扁) over insider-trading allegations against his relatives aggravated investors' nervousness.

"It's purely technical ... the steeper the previous declines, the more dramatic the rebound," said Oliver Fang, a Yuanta Core Pacific Securities (元大京華證券) assistant vice president who serves mainly foreign investors.

"It's too early to say if we are already out of the woods," he said. "All the uncertainties that had triggered the recent downturn remain firmly in place."

The technology sector rose 2.4 percent as a whole, and the financial sector gained 1.3 percent.

Index heavyweight Taiwan Semiconductor Manufacturing Co (台積電), the world's largest contract chipmaker by revenue, gained 4.7 percent at NT$58.5, after falling 10.6 percent over the previous four sessions.

Rival United Microelectronics Corp (聯電) rose 2.1 percent to NT$19.2, after Thursday's fall of 1.2 percent.