The key stock index staged its biggest gain in two weeks after Taiwan Semiconductor Manufac-turing Co said net profit tripled in the third quarter, boding well for the island's electronics industry.
Speeding the gains, financial services companies like Hua Nan Commercial Bank surged as investors snapped up the shares following their one-tenth slump as a group in a month.
The TWSE Index rallied 121.24, or 1.6 percent, to 7,680.87, its largest one-day gain since Oct. 12. Almost two issues rose for each that dropped while 75 were unchanged. Turnover, though, shrank to NT$54.4 billion (US$1.7 billion), its lowest level in a month.
The result from TSMC, the world's largest maker of chips to customers orders, "reassured investors the outlook for such foundries is extremely promising," said Liu Juming, a fund manager at Fubon Securities Investment Trust Co. Liu predicted October sales of TSMC will grow 15 percent from NT$6.1 billion a month ago.
TSMC jumped NT$1.50, or 1.1 percent, to NT$136.50. It said Friday its profit almost tripled to NT$6.14 billion from a year earlier thanks to rising demand. Gross margins rose to 44.5 percent from 33.2 percent during the period. "The sequential expansion in gross margin is impressive considering that in 3Q99 the company suffered a power outage in late July and the earthquake on Sept. 21," said Richard Wei, who tracks the semiconductor industry for Lehman Brothers in Hong Kong.
Wei said he's raising his estimate for TSMC's 1999 earnings to NT$3.10 a share from NT$3.05 forecast earlier. His estimate for next year is being increased to NT$5 from NT$4.48.
United Microelectronics Corp, rival of TSMC, rose NT$2, or 2.6 percent, to NT$80. Mosel Vitelic Inc climbed NT$1.30, or 3.7 percent, to NT$36.30.
Asustek Computer Inc jumped NT$5, or 1.6 percent, to NT$320.
The banking and insurance subindex soared 3.2 percent to 991.46, narrowing its fall to 9.2 percent since Sept. 21. "If you buy banking shares now, the chances of losing money are very little," said Oliver Lee, manager of AIG Securities Investment & Trust Co's NT$700 million Greater Taiwan Fund.
Hua Nan, among the 10 largest lenders, surged by the 7-percent limit to NT$43.20. First Commercial Bank was up 7 percent to NT$41.70. Chiao Tung Bank rose NT$1.50, or 3.6 percent, to NT$42.80.
Chinatrust Commercial rose NT$0.90, or 3.3 percent, to NT$28.40.
Steel and cement shares dropped as the impact of Friday's earthquake in Chiayi wasn't as big as expected, some analysts said. China Steel Corp fell NT$0.30, or 1.2 percent, to NT$24.10. Friday, it gained 1.2 percent. Taiwan Cement Corp slid NT$0.60, or 2.6 percent, to NT$22.40. Asia Cement Corp shed NT$0.20, or 0.8 percent, to NT$26.30.
Recordable computer disc shares rose as they reported solid earnings growth last week. CMC Magnetics Corp, whose buyers include Mitsubishi Corp, rose NT$4, or 3.2 percent, to NT$130.50. CMC has said that profit in the September quarter surged 429 percent to a record NT$3 billion on year.
Ritek Inc, which sells the discs to Philips Electronics NV and others, jumped NT$2, or 1 percent, to NT$205. Ritek has said its preliminary profit in the year's first nine months rose to more than NT$3.7 billion, or NT$6.49 a share.
Acer Inc climbed NT$1.50, or 2.7 percent, to NT$57.
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