Taiwan's key stock index rose, reversing earlier losses, as traders said government funds brought lenders such as China Development Industrial Bank (中華開發銀行) to boost investor confidence after the index plunged 12 percent last week.
"Certainly there was some government buying -- all financial shares went up," said Tu Kuei-shiong, who helps manage NT$200 million (US$6 million) in Taiwan stocks at Lian-Shan Investment Management Co.
Chipmakers such as Taiwan Semiconductor Manufacturing Co (TSMC,
The TWSE Index rose 6.55, or 0.2 percent, to 3781.17, erasing an earlier 2.9 percent drop, in its first day of trade this week. Within the index, 241 stocks fell and 219 rose. The government has a US$500 billion (US$14.5 billion) fund to support the stock market, though it doesn't comment on its activities.
Investors today got their first chance to react to the resumption of US trading since the terrorist attacks as well as assess the impact of the typhoon.To stem the expected selling, the government halved the daily limit by which stocks may drop to 3.5 percent through Sept. 28.
Still, some investors also said stocks are cheap and offer good value over the next 12 months.
"The market is cheap now, every stock is cheap," said Francis Koo, who helps manage about NT$14 billion (US$406 million) in Taiwan equities at ING CHB Funds.
Banks rose after the government stabilization fund bought shares, traders said. The central bank's half point rate cut, backing efforts by central banks around the world, may help ease the burden of non-performing loans for lenders, though credit growth is unlikely to recover soon, said Michael Spencer, chief Asian economist at Deutsche Bank AG.
China Development Industrial Bank, the biggest lender by market value, rose NT$1.20, or 6.3 percent, to NT$20.30, after earlier falling to a 52-week low. Chinatrust Commercial Bank (
Chipmakers declined as government buying wasn't enough to absorb the selling after their US shares slumped yesterday. The widely watched Philadelphia Semiconductor Index, a price-weighted index of 16 companies involved in the design and manufacture of chips, dropped fell 6.3 percent yesterday.
TSMC, the biggest made-to-order chipmaker, fell NT$1.50, or 2.7 percent, to NT$54. TSMC's American depositary receipts yesterday fell 6.6 percent. United Microelectronics Corp (UMC,
Some insurers dropped on concern claims for damages and personal injury following the typhoon may increase, depressing their earnings.
Fubon Insurance Co (富邦產險), the second-biggest insurer by market value, fell US$0.70, or 2.5 percent, to NT$27.70. Taiwan Life Insurance Co (台灣人壽), the third-biggest insurer by market value, fell US$0.30, or 1.1 percent, to NT$28.20.
Memory chipmakers dropped on worry about slowing demand and as the spot price for their main product remains below the cost of production. The spot price for the 64-megabit DRAM chip fell to US$0.73, according to DRAM Exchange, a market place for memory chips.
Winbond Electronics Corp (華邦電子) fell NT$0.40, or 3.2 percent, to NT$12.05. Mosel Vitelic Inc (茂矽電子) fell NT$0.25, or 3.4 percent, to NT$7.10. Nanya Technology Corp (南亞科技) fell NT$0.35, or 3.5 percent, to NT$9.80. ProMOS Technologies Inc (茂德科技) fell NT$0.45, or 3.2 percent, to NT$13.45.
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