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TAIEX rallies to 7,580 on turnover of over NT$122 bil.

Taiwan share prices closed up 76.62 points, or 1.02 percent, at 7,580 on turnover of NT$122.79 billion (US$4.22 billion) yesterday.

The Taiwan Stock Exchange's main index (TAIEX) opened 15.52 points higher at 7,519.07 on turnover of NT$1.877 billion.

Meanwhile, the greenback fell against the New Taiwan dollar, declining by NT$0.031 to close at NT$29.116 as strong foreign institutional buying on the local bourse boosted demand for the local currency.

The electronics sector led the upside as Taiwan Semiconductor Manufacturing Co. (TSMC), the most weighted stock on the main board, attracted strong buying, according to the Central News Agency.

Other high-tech heavyweights, like flat panel makers Innolux Corp. and AU Optronics Corp. (AUO), posted gains on hopes of improved bottom lines.

The market opened up 0.21 percent on follow-through buying as investors witnessed the Dow Jones Industrial Average return to the 13,000-point mark overnight.

High-tech Stock Growth

Buying on the local bourse accelerated as interest in large cap high-tech stocks increased, but some profit-taking pressure appeared after the index moved closer to the nearest technical resistance at around 7,600 points, CNA cited dealers as saying.

For the week, the main board gained 3.47 percent to hit its highest level since Oct. 9, when the index closed at 7,592.01, as select high-tech stocks kept moving ahead throughout the week.

TSMC rose 2.28 percent to NT$98.70 with 74.92 million shares changing hands as several foreign brokerages said the world's largest contract chip-maker has been one of their top picks in the local market.

Handheld device camera lens supplier Largan Precision rose 4.34 percent to close at NT$794, and notebook computer maker Compal Electronics gained 7 percent, the maximum daily increase, to end at NT$19.65.

The cement sector scored the highest gains among the eight major sectors of the market, finishing up 1.52 percent. By the end of session, machinery and electronics rose 1.26 percent, and the textile and financial sectors closed up 1.18 percent.

Construction stocks gained 0.92 percent, plastics and chemicals rose 0.45 percent and foodstuffs added 0.38 percent, while the paper and pulp sector closed down 0.49 percent.

On the back of strong interest in large cap high-tech stocks on the local main board, foreign institutional investors bought NT$15.33 billion (US$527 million) in local shares.

Investors Optimistic

According to dealers, the foreign institutional buying not only pushed up the benchmark weighted index 1.02 percent to 7,580.17 points at the close, but also raised demand for the New Taiwan dollar throughout the forex trading session.

Dealers explained that the massive foreign institutional buying showed further inflows of foreign funds as foreign investors rushed to take advantage of relatively low valuations in the local bourse.

Increasing market optimism toward the regional economy prompted traders to move their funds out of the U.S. dollar as a safe haven after Japan reported a 1.8-percent increase in industrial output for October, dealers explained. It was the first time in four months Japan reported higher industrial output, they noted.

A rising euro also added downward pressure on the greenback in the local foreign exchange market after the European Commission reported improving economic sentiment for November for the first time in almost a year, dealers said.

According to dealers, the upbeat market growth over regional economic fundamentals also led traders to bet that China will report an increase in manufacturing activity for November.

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