Taiwan stocks rose, led by United Microelectronics Corp (UMC,
The TAIEX Index rose 68.84, or 1.5 percent, to 4589.60.
Within the index, 286 stocks rose and 160 fell. The total value of trade today was NT$45.29 billion (US$1.3 billion), 39 percent below this year's average of NT$74.3 billion.
"Most of the bad news is in the market," said George Hou, who manages NT$2.3 billion (US$67 million) in Taiwan stocks at JF Asset Management Ltd. in Taipei. "Fundamentals have hit bottom. For the long-term investor, a year or more, it's a buy."
The Philadelphia Stock Exchange Semiconductor Index, a price weighted index of 16 companies that design and make chips, gained 1.8 percent yesterday.
The TAIEX and the Philadelphia Semiconductor Index have had a 0.87 correlation over the last 12 months. A positive correlation indicates the two indexes move in tandem with each other with 1 indicating they are perfectly correlated.
The TAIEX is the seventh-worst performing index in the world over the last three months, down 16 percent in US dollar terms.
Semiconductor stocks rallied after Goldman analysts said US chipmakers' business will improve in the fourth quarter as US economic growth speeds up. The US is Taiwan's biggest export market. Goldman joins Salomon Smith Barney Inc and Merrill Lynch & Co among the optimists that predict chipmakers' earnings will improve later this year.
UMC, the second-largest contract chipmaker, rose NT$1.70, or 4.6 percent, to NT$38.70. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the largest contract chipmaker, rose NT$1, or 1.5 percent, to NT$69. Its American depositary receipts rose US0.03, or 0.2 percent, to $15.94, a 62 percent premium to the local stock.
Winbond Electronics Corp (華邦電子), a memory chipmaker, surged NT$1.40 to NT$21.70.
Transport shares rose after a government advisory panel recommended that Taiwan open up trade, postal and transport links with PRC, as well as relax its investment restrictions.
China Airlines Co (
Eva Airways Corp (
Taiwan Cellular Corp (
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