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Market hits over 6-year high on strong electronics

TAIPEI--Shares in Taiwan extended their gains Tuesday from a session earlier to hit a high of more than six years as the bellwether electronics sector attracted buying in the wake of a rising tech-heavy NASDAQ index overnight, dealers said.

The weighted index on the Taiwan Stock Exchange ended up 48.85 points, or 0.52 percent at 9,441.92, after moving between 9,374.28 and 9,463.06 on turnover of NT$114.42 billion (US$3.83 billion).

Upward Momentum Continued

Buying focused on large-cap electronics stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), Hon Hai Precision Industry Co. (鴻海精密) and Advanced Semiconductor Engineering Inc. (ASE, 日月光半導體), to push up the broader market, the dealers said.

The closing level was the highest since Nov. 1, 2007, when the market ended at 9,598.23 points.

The market opened unchanged and fell into the red on a mild technical correction, but buying emerged with investors rushing to pick up high-tech heavyweights, helping the index return to positive territory and even pass the 9,400-point market at the close, the dealers said.

"Thanks to the gains posted on the NASDAQ index, which offset the impact from a falling Dow Jones Industrial Average, the local electronics sector steamed ahead to push the broader market higher," Hua Nan Securities analyst Stan Chang said.

"Many investors have high hopes that the high-tech sector will benefit from peak-season effects as it enters the third quarter," Chang said.

"Among these gaining electronics stocks, many investors favored large-cap stocks during the session."

TSMC, the most heavily weighted stock in the local market, rose 1.19 percent to close at NT$128.00, on continued optimism over the integrated circuit (IC) industry over the next six months.

ASE Scratches 7-year Itch

ASE, the world's largest IC packaging and testing services provider, hit an almost seven-year high, rising 2.96 percent to close at NT$40.00 on hopes about a company statement that its production capacity will be fully utilized in the second half of this year.

Hon Hai, which assembles iPads and iPhones for Apple Inc., gained 2.00 percent to close at NT$102.00 after it announced a day earlier that it has acquired 2.45 million shares, or a 4.9 percent stake, in SK C&C Co., a South Korean total information technology services provider.

Led by these large-cap high-tech stocks, the electronics sub-index ended up 0.86 percent, but stocks in the non-high-tech sector appeared mixed as most of the funds flocked into the electronics sector, Chang said.

In the old economy sector, Eclat Textile Co (鴻儒企業), fell 4.01 percent to close at NT$347.50 and Wei Chuan Foods Corp. lost 0.55 percent to end at NT$44.85, while Formosa Plastics Corp. rose 0.25 percent to close at NT$80.00.

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