Wed, Mar 18, 2009 - Page 1 News List

TAIEX rises for third day to break 5,000-point mark

By Crystal Hsu  /  STAFF REPORTER

The TAIEX rose for the third straight day yesterday to break the 5,000-point mark, while the New Taiwan dollar climbed for the fifth day to a one-month high on hopes that Chinese tourists would boost consumption and that the worst of the global financial storm was over.

The benchmark index rose 70.07 points, or 1.41 percent, to 5,041.39 — its strongest showing since Oct. 16, Taiwan Stock Exchange data showed.

Turnover was NT$107.39 billion (US$3.13 billion), with foreign funds buying a net NT$3.568 billion in local shares.

Alan Tseng (曾炎裕), an analyst at Capital Securities Corp (群益證券), said institutional investors at home and abroad had increased their holdings of local equities in recent days because Wall Street seemed to have stabilized.

“The worst of the global financial crisis is over,” Tseng said by telephone.

“Investors regained [their] risk appetite as the plunge in US financial stocks eased off — a sentiment that also buoyed the local bourse,” he said.

The financial subindex closed up 2.72 percent on the back of a 7.29 percent gain in its US counterpart, even though the Dow Jones Industrial Average shed 7.01 points.

Tseng said the arrival of a large group of Chinese tourists on Monday had also contributed to the rally, with shares of many tourism companies performing well yesterday.

But profit-taking pulled the subindex down 0.69 percent, Tseng said.

The optimism spread to the foreign exchange market, where the NT dollar rose NT$0.138, or 0.37 percent, to NT$34.278 against the greenback.

Turnover was US$1.244 billion on the Taipei Forex and US$412 million on the smaller Cosmos Foreign Exchange, bringing total transactions to US$1.656 billion, statistics from the two companies showed.

A dealer at a domestic bank said he was concerned about the rising value of the NT dollar because the economic outlook remained gloomy.

“The NT dollar’s appreciation had more to do with speculation than investors regaining their confidence,” the dealer said on condition of anonymity. “They will pull out of the market once they meet their profit goal.”

But the dealer said it was likely that the central bank would intervene and spoil speculators’ plans.

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