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Local market closes higher, extending gains

TAIPEI--Shares in Taiwan closed higher Wednesday, extending gains from a session earlier, as investors were encouraged by a fresh high on Wall Street overnight, dealers said.

The weighted index on the Taiwan Stock Exchange ended up 57.22 points, or 0.64 percent, at the day's high of 8,875.16, off an early low of 8,812.19, on turnover of NT$86.27 billion (US$2.86 billion).

Laptop Stocks Rebound

The strength of the bellwether electronics sector helped the broader market fend off sporadic pressure during the session as notebook computer stocks staged a rebound, the dealers said.

The market opened up 0.27 percent in a knee-jerk reaction to the gains on Wall Street, where the Dow Jones Industrial Average and the S&P 500 index hit new record highs for the second consecutive session, the dealers said.

Although some investors locked in their earlier gains to cap the uptrend at one point, buying in select high-tech stocks turned more visible, which pushed up the index to the day's high at the close, they said.

"Market attention focused on notebook computer stocks, such as Inventec Corp. (英業達) and Asustek Computer Inc. (華碩電腦), as investors were either impressed by their earnings or were drawn to their relatively low valuations," Mega International Investment Services Corp. analyst Alex Huang said.

Inventec rose 3.04 percent to close at NT$27.10 after the contract notebook computer maker reported a better bottom line for the first quarter due to its efforts to add non-PC devices to its product portfolio.

Asustek gained 2.71 percent to end at NT$303.00 on a technical rebound, while Compal Electronics Inc. (仁寶電腦) added 3.85 percent to close at NT$22.95 after the company announced a buy-back of up to 100 million shares in a bid to prop up its share price.

Textile Sector Plunges on Vietnam Unrest

"The textile sector, which has poured large amounts of funds into Vietnam, came under pressure as investors feared escalating violence there will hurt their production," Alex Huang said.

Among the falling textile stocks, Eclat Textile Co. fell 3.01 percent to close at NT$306.00, and Makalot Industrial Co. shed 2.05 percent to end at NT$143.50.

"We have to watch closely how the unrest in Vietnam evolves, as it could hurt investor sentiment and prompt them to cut their holdings ahead of strong technical resistance at 8,900-8,950 points," Huang said.

Huang said Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, also attracted interest on its sound fundamentals. TSMC closed up 1.24 percent at NT$122.00.

The financial sector moved higher, also lending support to the index, while the textile sector underperformed the broader market amid fears that anti-China protests in Vietnam will affect Taiwanese textile makers' operations in that Southeast Asian country, they added.

In the financial sector, Fubon Financial Holding Co. (富邦金控) rose 1.52 percent to end at NT$40.05 and Cathay Financial Holding Co. (國泰金控) added 1.01 percent to close at NT$44.95 on active bargain hunting.

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