Stock market rises 1.2 percent, led by Asustek

The TAIEX rose yesterday, paced by Asustek Computer Inc (華碩電腦), after the country's largest computer motherboard maker said sales in April rose 10 percent from a year ago, suggesting demand may pick up.

The TWSE Index rose for a fourth day, gaining 68.02, or 1.2 percent, to 5,807.30. It fell 1.7 percent this week. Investors said possible government fund buying may have lifted stocks, with most of the index's gains made in the last half hour of trading.

The total value of trade was NT$81.7 billion, 30 percent less than the daily average in the past three months.

Asustek gained NT$6, or 4.9 percent, to NT$128. It has dropped 29 percent in the past three months.

Au Optronics Corp (友達光電), the world's third-biggest maker of flat-panel displays, rose NT$2.9, or 6 percent, to NT$51.5, after concerns about the water shortage eased.

"The recent correction in computer-motherboard makers and flat-panel display makers has been quite severe, so investors have started buying again, especially with hopes of rain arriving these few days" and breaking the nation's worst drought in almost a decade, said Lilian Chen, who helps manage NT$2 billion of Taiwan equities at Polaris International Securities Investment Trust Co (寶來投信).

Within the index, 264 stocks rose, 230 declined and 67 were unchanged.

The drought has forced parts of the island to ration water supplies, which threatens to raise companies' costs and hurt production volumes.

"The bourse is to undergo consolidation with the index moving between 5,500 and 6,000," said Polaris Vice Chairman Peter Chang. "It would be difficult for the index to climb above the 6,000 resistance level unless daily turnover can reach NT$120 billion (US$3.47 billion)."

Investors were likely to take to the sidelines awaiting fresh leads, with strong support at the 5,500-point level amid signs of a recovery by Taiwan's economy, Chang said.