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Liquidity-driven buying helps shares counter Wall Street

Shares closed 0.69 percent higher yesterday as liquidity-driven buying outweighed Wall Street's overnight fall due to caution ahead of next month's US corporate earnings reports, dealers said.

Fund managers lent support to their positions in the last trading session of the quarter, while appreciation of the local currency also heightened expectations of further capital inflows, they said.

Taiwan's markets traded yesterday as a make-up session for a public holiday last Monday.

The TAIEX closed up 64.57 points at 9,476.52 after trading in a range between 9,424.71 and 9,482.37. Turnover was NT$124.75 billion (US$3.78 billion).

Risers led decliners 1,152 to 683, with 229 stocks unchanged.

On the foreign exchange market, the New Taiwan dollar ended the session at NT$32.580 against its US counterpart, an increase of NT$0.087 from the previous close of NT$32.667.

The local currency rose after central bank Governor Perng Fai-nan (彭淮南) said the bank may raise its key interest rate further to contain an increasing inflation risk.

The real interest rate is still below "neutral" and the bank will continue to fine-tune borrowing costs, Perng said in a prepared statement to be delivered to the legislature's finance committee tomorrow.

Kevin Chung (鐘國忠), a manager at Jih Sun Securities Investment Consulting Co (日盛投顧), said ample liquidity had served as the driving force behind the equity market.

The NT dollar movements, corporate sales for the month and any profit-taking or technical pressure would be variables on the local bourse next week, he said.
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