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Local market reaches 34-month high at 8,930.57

TAIPEI, Taiwan -- Led by Taiwan Semiconductor Manufacturing Co. (TSMC,台積電) and other bellwether high-technology stocks, the local market on Wednesday climbed 42.32 points to close at a 34-month high of 8,930.57.

According to the Central News Agency, the buying in the heavyweight electronics sector was encouraged by gains posted on the tech-heavy Nasdaq index overnight.

The optoelectronics sector helped push high-tech shares higher as smartphone camera lens supplier Largan Precision Co. (大立光電) continued its momentum on the back of strong March sales data, they said.

Swayed also by AU Optronics Corp.'s (友達光電) March sales report, investors picked up flat panel stocks because of anticipated rising demand from Chinese buyers, they added.

The weighted index on the Taiwan Stock Exchange closed up 42.32 points, or 0.47 percent, at 8,930.57, after fluctuating between 8,912.39 and 8,936.57, on turnover of NT$91.63 billion (US$3.05 billion).

The market opened up 0.27 percent to breach the 8,900-point mark after high-tech stocks rebounded in U.S. markets overnight, and the momentum continued to the end of the session, dealers said.

"After protesting students skeptical of the trade-in-services agreement with China said they would withdraw from the Legislative Yuan's main chamber Thursday, investors here shifted their attention back to economic factors," Mega International Investment Services Corp. analyst Alex Huang said.

"A rebound on the Nasdaq index simply served as a catalyst to boost the local large-cap electronics sector," Huang said.

The electronics sub-index closed up 0.60 percent, helped by a 1.79-percent rise in the optoelectronics segment.

Lagan's Top Line Expected to Hit NT$3 Billion April

Largan, which retained the title as the most expensive stock in the local market, gained 2.82 percent to close at NT$1,640.00 after rising by the maximum daily increase of 7 percent a session earlier on the strong March sales data released Monday.

The market expects Largan's April sales to grow further to hit NT$3 billion.

The smartphone camera maker posted NT$2.83 billion in consolidated sales for March, up 77 percent from a month earlier and also up 74 percent from a year earlier on solid demand for high-end lenses.

“There is no question that Largan is a fundamentally healthy company. But after recent strong institutional buying, the stock is expected to face stiff technical resistance at around NT$1,800 in the near term,” Huang said.

AUO rose 3.45 percent to end at NT$12.00 after the flat panel maker reported a day earlier that its consolidated sales for March rose 20.7 percent from February to NT$34.02 billion. Analysts said strong buying from China could boost AUO's April revenue by 10 percent month-on-month.

TSMC, the most heavily weighted stock in the local market, closed unchanged, however, at NT$119.00 after the stock hit an early high of NT$120.00, the nearest technical hurdle.

In the old economy sector, Taiwan Cement Corp. (台灣水泥) gained 1.92 percent to close at NT$47.80, while Asian Cement Corp. (亞洲水泥) and Formosa Plastics Corp. (台塑) ended flat at NT$38.30 and NT$77.50, respectively.

“After the index breached 8,900 points, the local market entered consolidation mode,” Huang said. “As Wall Street is now in an earnings season, many investors fear that any negative leads will create volatility and in turn affect regional equity markets, including Taiwan.”

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Financial Supervisory Commission Chairman Tseng Ming-chung (曾銘宗) speaks about the recent strong performance of Taiwan's share market during an interpellation session at the Legislative Yuan, yesterday. (CNA)

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