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Taiwan index gains on electronics and plastics industries

Taiwan's benchmark index gained 4.17 percent yesterday, boosted by strength in electronics and plastic shares.

The Weighted Price Index of the Taiwan Stock Exchange rose 314.73 points to close at 7,865.28, its highest close since Jan. 21.

The rise followed the overnight rally in US tech shares after encouraging retail sales data.

Edward Lien (連又賢) of Fubon Securities (富邦證券) said investors seemed to be more relaxed about the US economic outlook.

"Concerns over a US economic slowdown seemed to ease a bit in the Asian markets," Lien said.

The electronics subindex rebounded from a 10.5 percent fall in the past month, gaining 4.9 percent.

Hon Hai Precision Industry (鴻海) surged 6.7 percent to NT$174.50. MediaTek (聯發科) rose 6.8 percent to NT$304.50.

The New Taiwan dollar was little changed on speculation some exporters bought the currency to guard against further gains while some traders sold it on the prospect the central bank would intervene.

The currency swung between gains and losses near a 20-month high, an advance that was spurred by the interest-rate premium over the US following two cuts in borrowing costs by the Federal Reserve this year.

"Exporters and retail investors are taking the Taiwan dollar," said Yang Kung-yi (楊恭逸), a currency trader at Shanghai Commercial & Savings Bank (上海商業儲蓄銀行) in Taipei.

"Some conservative investors who had bought foreign currency because of interest-rate differentials are converting their US dollars into the local currency," Yang said.
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