Stocks rose after US economic reports spurred optimism that the Federal Reserve will lower interest rates this week, boosting the allure of equity investments. Computer-parts makers such as Quanta Computer Inc (廣達電腦) led gains.
Stocks also rose after a US judge approved most of the antitrust settlement between the Bush administration and Microsoft Corp, averting penalties that Microsoft Chairman Bill Gates said would force the company to pull its Windows operating system from the market.
The TAIEX rose 83.13, or 1.9 percent, to close at 4,583.68. More than two stocks rose for every one that fell. The total value of trade was NT$82.56 billion (US$2.38 billion), 29 percent above the three-month daily average.
Reports in the US on Friday showed unemployment rose and manufacturing slowed in the world's biggest economy last month. The Fed is due to announce its rates decision tomorrow.
"The economy's weakness is already factored into stock prices," said Joseph Hsu, who helps manage about NT$600 million in stocks at Fuh Hwa Cheng Ching Capital Management Co (復華證金投顧). With an expected interest rate cut, "more and more money will flow from the bond market into the stock market."
Quanta, whose customers include Dell Computer Corp, rose NT$2.50, or 3.6 percent, to NT$73. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which sold more than three-quarters of its chips to US customers in the third quarter, rose NT$2, or 4.4 percent, to NT$47.
Asustek Computer Inc (華碩電腦) rose NT$1, or 1.4 percent, to NT$73. Taiwan's largest computer-circuit-board maker may post record sales in October after Hewlett-Packard Co began increasing orders to computer-parts makers from the fourth quarter.
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