Taiwan's key stock index posted its largest advance in two weeks as Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) and other chipmakers tracked gains in their US peers.
The key TWSE Index rose 98.58, or 2.8 percent, to 3618.93, its biggest gain in percentage terms since Sept. 26. Within the index, 321 stocks rose and 116 fell.
The total value of shares traded yesterday was NT$36.1 billion (US$1.1 billion), compared to NT$26.7 billion on Monday.
"It is a technical rebound, but I don't think it will be a sharp rebound," said Steven Hsieh, who manages about NT$2.5 billion (US$72 million) in Taiwan equities at Dresdner Asset Management Taiwan Ltd.
Hsieh isn't buying shares or selling shares because the US and UK's strikes against Afghanistan's Taliban regime has made the outlook for economic growth and corporate earnings "uncertain."
Chipmakers rose after the widely watched Philadelphia Semiconductor Index, a price weighted index of 16 companies involved in the design and production of chips, rose 5 percent yesterday, suggesting investors are willing to overlook a few quarters of slower earnings growth on expectations demand will recover sometime next year.
TSMC, the biggest made-to-order chipmaker, rose NT$3.20, or 7 percent, to NT$49.20. TSMC's American depositary receipts rose 3.8 percent to US$9.64 yesterday.
United Microelectronics Corp (UMC, 聯電), the second-biggest made-to-order chipmaker, rose NT$1.70, or 6.8 percent, to NT$26.90. UMC's ADRs rose 3.6 percent to US$4.91.
Computer parts makers gained after the TWSE Electronic Index's relative strength index, derived from averaging out the daily gains and losses over 14 days, fell to 29.6 yesterday. A relative strength value below 30 indicates an index is poised to gain.
Acer Inc (宏電), which makes computers under its own brand and for International Business Machines Corp, rose NT$0.45, or 5 percent, to NT$9.55. Asustek Computer Inc (華碩電腦), the nation's biggest computer motherboard maker, rose NT$1, or 0.9 percent, to NT$110.
Hon Hai Precision Industry Ltd (鴻海精密), which makes everything in a computer except chips, rose NT$3.50, or 3.3 percent, to NT$110. Quanta Computer Inc (廣達電腦), Taiwan's biggest notebook computer maker, rose NT$2, or 2.9 percent, to NT$70. Via Technologies Inc (威盛電子), the second-biggest chipset designer and seller, rose NT$4.50, or 6.4 percent, to NT$74.50.
Powerchip Semiconductor Corp (力晶半導體) rose NT$0.45, or 6.6 percent, to NT$7.30 after the computer memory chipmaker said it plans to upgrade its factory to extend its range of products to attract other customers.
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