Share prices on the Taiwan Stock Exchange closed 1.58 percent higher yesterday, the first trading day after the Lunar New Year holiday, with the benchmark TAIEX rising 118.20 points to finish at 7,560.04.
Reflecting a rally on world stock markets, the stock market opened at the day’s high of 7,619.87, before dropping to a low of 7,553.29.
The strong showing came after US stocks finished higher on Friday for a second consecutive week, despite the US Federal Reserve raising the discount rates to banks for direct loans by 0.25 percent and a lessening of market fears over sovereign defaults in the euro zone.
PHOTO: CHANG CHIA-MING, TAIPEI TIMES
An easing in selling pressure prior to the holiday also helped give a boost to the local bourse, analysts said.
A total of 3.19 billion shares changed hands on market turnover of NT$94.44 billion (US$2.95 billion). Foreign investors and Chinese qualified domestic institutional investors were net buyers of NT$3.43 billion in shares.
All eight major stock categories gained ground, with banking and financial stocks the biggest gainers, showing a gain of 3.94 percent.
“Insurers and banks seem bound to rip gains from an apparent earlier-than-expected worldwide interest rate up-cycle now that China and the US have both increased rates during the Lunar New Year holiday,” SinoPac Securities Corp (永豐金證券) said in a note yesterday.
Chinatrust Financial Holding Co (中信金控) surged by the 6.9 percent daily limit, the biggest advance since June 24, to NT$17.95, leading financial shares higher on the expectation that the nation’s central bank may raise interest rates, KGI Securities Co (凱基證券) analyst Tseng Fan-jen said.
If the central bank does raise rates “it would potentially improve the margins for banks,” Tseng said in a telephone interview.
The New Taiwan dollar surrendered earlier gains in late trading on suspected intervention by the central bank.
The NT dollar closed at NT$32.099 against its US counterpart, little changed from NT$32.100 on Feb. 12, the last day of trading before the Lunar New Year break, Taipei Forex Inc said.
The currency, which has strengthened 8.6 percent in the past 12 months, retreated in late trading as the central bank bought the greenback, said traders who asked not to be identified.
“Definitely there’s some intervention,” said Joanna Tan, a regional economist at Forecast Singapore Pte.
“The central bank’s stance is still the same. It’s to keep the New Taiwan dollar competitive for exporters,” she said.
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