Taiwan shares close up 1.23% on Wall St. rally

The weighted index rose 94.88 points to 7,761.22, after moving between 7,739.04 and 7,782.02, on turnover of NT$122.80 billion.

The market opened up 1.04 percent and extended the gains until the end of the trading session, with buying focusing on large cap high-tech stocks as market sentiment was boosted by Wall Street's strong showing, dealers said.

A total of 2,343 stocks closed up and 1,031 down, with 316 remaining unchanged.

The paper and pulp sector posted the highest gains, up 1.8 percent. The textile and construction sectors closed up 1.7 percent each, while the machinery and electronics sector rose 1.5 percent.

Both the cement sector and the plastics and chemical sector gained 1.4 percent, the financial sector rose 0.7 percent and the foodstuff sector added 0.4 percent.

“Judging from the upside of high-tech heavyweights today, I suspect the buying largely came from foreign institutional investors,” Grand Cathay Securities analyst Mars Hsu said.

“Friday's movements showed that Wall Street continued to dictate the local bourse. As a U.S. earning season remains underway, investors here had better follow U.S. markets closely,” Hsu said.

The local bourse's rise, however, was smaller than Dow Jones Industrial Average's 2 percent surge.

“Several major local high-tech firms are scheduled to report their second quarter results next week. That's why the willingness to chase prices has been limited,” Hsu said.

Taiwan Semiconductor Manufacturing Co. (TSMC), flat panel maker AU Optronics, smartphone maker HTC and integrated circuit designer MediaTek are due to release their quarterly earnings next week.

Hsu said that after Thursday's rebound, the market moved closer to the nearest technical resistance at around 7,800 points.

“Unless turnover expands to between NT$140 billion and NT$150 billion, it is not easy for the market to jump over the technical hurdles,” he said.

Hsu said the Committee of European Banking Supervisors will release banks' stress test results Friday, which are expected to move global markets next week.

Hon Hai Precision, the world's largest contract maker of electronics products, rose 5.04 percent to NT$125.00, and MediaTek gained 3.75 percent to NT$470.

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