Taiwan stocks rose for a second day, led by AU Optronics Corp (友達光電), after Morgan Stanley Capital International Inc said it's adding the world's third-largest flat-panel-display maker to its indexes.
Fund managers who track the MSCI indexes will buy the company's shares to balance their portfolios.
"Its inclusion is positive for the stock, but the fundamentals are also important, and those are pretty strong," said Kevin Hsiao, who manages NT$580 million (US$17 million) in stocks at President Investment Trust Corp (統一投信).
Rising demand for flat-panel displays used in notebook computers and computer monitors lifted prices about 30 percent in the past six months, boosting earnings.
The TAIEX rose 108.83, or 1.8 percent, to 6182.59. The index had its first weekly decline in four, slipping 0.4 percent.
Within the index, 314 stocks fell and 187 rose. The total value of trade was NT$117.7 billion (US$3.4 billion), matching the six-month daily average of NT$116 billion.
MSCI yesterday unveiled the final set of changes to its stock indexes that adjust for free float, or the number of a company's shares that are available for trading.
They come into effect May 31. Taiwan's weighting was raised 0.7 percentage points to 15.8 percent in its Emerging Markets Free Index.
AU Optronics rose NT$3.50, or 6.9 percent, to NT$54.
Morgan Stanley Capital International Inc said that it is adding the world's third-largest flat-panel-display maker to its indexes, prompting fund managers who track them to buy the company's shares to balance their portfolios.
Rival optics company Chung-hwa Picture Tubes Ltd (中華映管) rose NT$2.70, or 7 percent, to NT$41.3.
Formosa Plastics Corp (台塑) rose NT$1.10, or 2.6 percent, to NT$44.20 after the Commercial Times reported sales at the flagship of Taiwan's largest industrial group may rise to a record of more than NT$6 billion in April.
Sunplus Technology Co (凌陽科技) rose NT$4.50, or 3.4 percent, to NT$137 after ING Barings Securities Ltd increased its target price for the stock more than a tenth because of rising sales at the maker of chips for consumer products such as Hasbro Inc's Furby toys.
Unitech Printed Circuit Board Corp (燿華) rose NT$1.10, or 6.9 percent, to NT$17.10 after Motorola Inc placed an order for mobile-phone printed circuit boards with the Taiwan company.
United Microelectronics Corp (UMC, 聯電) rose NT$2.50, or 4.9 percent, to NT$53.50 after the world's second-largest made-to-order chipmaker said it will open a chip plant in Singapore ahead of schedule to meet better-than-expected demand for semiconductors.
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