Local shares closed up 1.9 percent yesterday, in line with neighboring markets, as buying was ignited by hopes that a stronger yuan would lift Asian currencies and lead to more foreign fund inflows into the region, dealers said.
The TAIEX rose 142.45 points to close at 7,635.56, after moving between 7,562.25 and 7,645.71, on turnover of NT$108.31 billion (US$3.37 billion).
The market opened 1.37 percent higher on ample liquidity, and the momentum extended throughout the session as investors expected a stronger New Taiwan dollar would attract more foreign investment and further boost liquidity, dealers said.
A total of 2,487 stocks closed up, 711 were down and 269 were unchanged.
Construction stocks led gainers, with the sector closing up 4.1 percent. Other gainers included the financial sector (2.6 percent), food (2.4 percent) and cement (2.1 percent).
“It was a liquidity-driven market today. The gains in expanded turnover have made the local bourse technically healthier,” First Capital Management Ltd analyst Edward Chen said.
Chen said yesterday’s advance could encourage many institutional investors, who had been staying on the sidelines, “to buy and catch up with the gains.”
“There is still room for the index to go higher,” he said.
Chen said construction should be the biggest beneficiary of a rising local currency, as higher liquidity could lift property prices.
“Foreign institutional investors are likely to continue to add to their holdings in the sector after recent portfolio adjustments,” he said.
Kuo Yang Construction Co (國揚建設) rose 6.9 percent to NT$20.15, Goldsun Development and Construction Co (國產建設) advanced 6.08 percent to NT$13.95, and Cathay Real Estate Co (國泰建設) gained 4.41 percent to NT$11.85.
Domestic demand-oriented stocks closed mostly higher on expectations a rising yuan would boost consumption in China as many have investments across the Taiwan Strait, dealers said.
Wei-Chuan Foods Corp (味全食品) gained 3.01 percent to NT$37.60, Taiwan Cement Corp (台泥) rose 1.98 percent to NT$28.35 and Cheng Shin Rubber Industry Co (正新橡膠) added 1.96 percent to NT$67.50.
Among financial stocks, Yuanta Financial Holding Co (元大金) closed up 3.47 percent at NT$17.90, Cathay Financial Holding Co (國泰金) rose 3.04 percent to NT$49.15 and Fubon Financial Holding Co (富邦金) gained 2.30 percent to NT$37.85.
Also See: World stocks soar on yuan flexibility
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