Taiwanese shares closed 0.94 percent higher yesterday as bargain hunting helped the market recoup early losses amid economic concerns, dealers said.
The weighted index rose 58.73 points at 6,310.68, off a low of 6,171.35 and a high of 6,354.68, on turnover of NT$91.62 billion (US$2.86 billion).
Gainers outnumbered losers 1,010 to 832, with 404 unchanged.
For the week, the weighted index rose 3.4 points or 0.05 percent after a 10.49 percent fall last week.
The market weakened in early trade on cautious sentiment toward economic fundamentals, but buying surfaced with bargain hunters taking advantage of low valuations after the index fell closer to 6,100 points, dealers said.
“The recent heavy losses largely reflected weak confidence. But the market has been oversold,” Mega Securities (兆豐證券) analyst Allen Huang said.
“To many long-term investors, the prices of blue chips look good at the moment,” Huang said.
Huang said that while he suspected part of the buying came from government-controlled funds to bolster market confidence, local institutional investors played a role behind the gains.
While critics said a NT$180 billion economic stimulus package announced by the government failed to boost shares, Huang said investors should have patience.
The measures include a halving of stock transaction tax, incentives for businesses and steps to boost investment and exports.
“It needs some time for the package to show some effects. And that’s why some institutional investors jumped into the trading floor to pick cheap stocks now,” Huang said.
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