Shares closed 1.88 percent higher yesterday as an initial rebound powered by Wall Street's record close overnight gained further momentum on buying support from government-related funds, dealers said.
Select government-related funds bought into large-cap stocks in an apparent attempt to support the market against any further repercussions or psychological impact of financial troubles at Rebar Asia Pacific Group (力霸亞太企業集團), they added.
The TAIEX closed up 143.16 points at 7,761.71, on turnover of NT$132.1 billion (US$4.03 billion) yesterday. Risers led decliners 976 to 252, with 133 stocks unchanged.
For the week to yesterday, the weighted index closed down 73.86 points or 0.94 percent after rising 0.15 percent a week earlier.
Average daily turnover stood at NT$130.52 billion, compared with NT$144.77 billion a week ago.
Analysts said that government-related funds bought large-cap stocks to assure the public that the impact of Rebar's woes was not too big for the government to handle.
Both local and foreign funds resumed buying yesterday, and their interest is expected to continue in the upcoming week amid optimism towards corporate earnings this year, they added.
"While Rebar Group members remain under a cloud of uncertainty, the broader market has begun attracting interest after the New York gains," Mega International Investment Services assistant vice president Alex Huang said, referring to the early rebound driven by a record finish on Wall Street.
For next week, Huang said corporate earnings would be crucial to market movement.
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