Share prices closed 2.96 percent higher yesterday, tracking Wall Street's continued rally overnight and further gains in other Asian markets, dealers said.
They said tech stocks led the gains after US firm Microsoft reported a surge in profits.
The weighted index closed up 222.54 points at the day's high of 7,739.59 on turnover of NT$118.14 billion (US$3.66 billion).
Risers led decliners 1,619 to 413, with 326 stocks unchanged. A total of 114 stocks closed limit-up, while 27 were limit-down.
The electronics sector was up 4.61 percent, cement rose 2.82 percent and financials added 0.87 percent.
"Margin calls earlier this week reduced the amount of margin loans outstanding, and that eased pressure in the market," said Mao Jen-chieh (
Integrated circuit design houses, victims of heavy selling since late last year, led the technology sector higher yesterday, dealers said.
Many large-cap tech stocks are due to release their results and guidance next week, including heavyweights Taiwan Semiconductor Manufacturing (
"I don't expect much of a surprise from local firms next week but we still have to see if there is any gap between their announcements and market expectations," Mao said.