Local bourse rallies by more than 3%
The China Post news staff
November 24, 2012, 12:26 am TWN
Taiwan's weighted stock index soared more than 3 percent yesterday in anticipation of government intervention to prevent the market from falling further, closing above the 7,300-point mark.
Investors bought into bargains by taking cues from the government's latest statement that it was time for state-run funds to pick up stocks after a recent slump, dealers said.
The buying momentum was further fueled by Premier Sean Chen's latest instruction made at a meeting with his Cabinet members that they come up with a plan to shore up the local bourse by the end of the year.
The bourse closed up 220.25 points, or 3.09 percent, at the day's high of 7,326.01, off an early low of 7,148.97, on turnover of NT$84.13 billion (US$2.89 billion).
The market opened up 0.61 percent on a technical rebound, and picked up momentum as investors paid close attention to comments and moves made by the government.
Government Funds Ready to Enter Market
Minister of Finance Chang Sheng-ford told lawmakers Thursday that as the stock market had dropped close to the nearest technical support of 7,000 points, government-led funds were ready to enter the market.
Chang noted that the Cabinet's NT$500 billion National Stabilization Fund was keeping a close watch on the low turnover in the market — a comment that was taken to mean the fund was set to enter the market.
"No matter whether the government-led funds started buying in local stocks or not, the minister's remarks did serve as an important indication that the government wanted to see a gaining stock market," Grand Cathay Securities analyst Mars Hsu was cited by the Central News Agency as saying.
"Encouraged by the government's mentality, many investors became willing to return to the trading floor and buy today," Hsu said, referring to the expanded turnover, up from NT$46.82 billion recorded a day earlier.