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Local market lifted by recent gains on Wall Street

TAIPEI, Taiwan -- Shares in Taiwan got a boost from a gain on Wall Street to close higher Wednesday, as buying rotated to large-cap stocks in the bellwether electronics sectors, dealers said.

However, the gains were capped by stiff technical resistance ahead of 8,600 points as investors remained cautious about an earnings season on Wall Street scheduled to kick off later in the month, the dealers said.

The weighted index on the Taiwan Stock Exchange ended up 43.71 points, or 0.51 percent, at 8,556.01, after moving between 8,548.61 and 8,587.08, on turnover of NT$115.44 billion (US$3.85 billion).

The market opened up 0.43 percent in a knee-jerk reaction to a gain on Wall Street overnight, and with buying in electronics heavyweights, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), accelerating, the index rose to the day's high, the dealers said.

As the index moved closer to 8,600 points, some investors shifted to the sell side, locking in gains posted earlier in the session, they said.

The trading volume breached the NT$100 billion mark for the first time since Oct. 3 last year, when turnover reached NT$115.80 billion after the government relaxed day trading rules, they added.

“Judging from the turnover, the relaxation in day trading prompted more investors to come back to trade in the market. It seems that the new rules have helped the local market come out of the recent doldrums,” Mega International Investment Services Corp. analyst Alex Huang said.

As part of the government's efforts to lure back investors and boost daily turnover, investors now are allowed to conduct day trading (buying and selling a stock on the same day) in 200 large- and mid-cap stocks, starting from Jan 6.

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