So called '520 curse' finally broken as TAIEX closes up 0.7%

Despite a heavy selling spree earlier in the day as Taiwan confirmed its first H1N1 case, the benchmark index TAIEX closed higher at the end of the trade in a sharp reversal of what it had been for the past nine years, in which stocks had always closed lower on May 20, the Inauguration Day for the ROC president.

The TAIEX yesterday could be described as volatile at best, moving in a margin of 150 points between a high of 6,740.7 and a low of 6,509.79. At closing, the index rose by 48.03, or 0.7 percent, to close at 6,703.62, the highest since Sept. 1, on turnover of NT$191.556 billion.

The index opened higher yesterday, yet at around 10:00 a.m. when the Center for Disease Control confirmed Taiwan's first swine flu case, it took a nosedive. The index later went back up as the CDC assured the public it had the situation under control.

Most biomedicine- and biotechnology-related shares rose upon the report. Universal Inc., which makes non-woven fabrics such as baby diapers and surgical gowns, gained the maximum 7 percent to a record NT$22.25. Mao Bao Inc., a maker of household cleaning products, rose by its daily limit of 6.9 percent to NT$15.45, the highest since May 22, 2008.

Overall, Taiwan's three major institutional investors made a total net purchase of NT$6.642 billion, breaking down into a net purchase of NT$7.028 billion by foreign investors, net sale of NT$78 million by investment trusts, and net sale of NT$307 million by securities firms.

Chi Mei Optoelectronics Corp., Taiwan's No. 2 maker of liquid-crystal displays, led optoelectronics stocks higher after China said Tuesday it is widening its subsidies program to include home appliances.

Chi Mei surged 6.9 percent to NT$18.7 at the close, the biggest gain since May 4, while AU Optronics Corp., the world's third-largest flat panel maker, climbed 3.3 percent to NT$35.9. Chunghwa Picture Tubes Ltd. added 6 percent to NT$5.68.

The Chinese government said it will provide 2 billion yuan to encourage consumers to replace old home appliances with new ones. An index of 41 optoelectronics companies on TAIEX gained 3 percent to 59.05, the highest since Sept. 8. It is also the second-best performer among the exchange's 20 industry gauges yesterday.

In other stocks, HTC Corp. rose for a second day, climbing 4.9 percent to NT$513, the highest since Sept. 26, after NTT DoCoMo Inc., Japan's largest mobile-phone operator, said it plans to sell a handset made by the Taiwanese manufacturer.

Lite-On Technology Corp., the world's biggest maker of mobile-phone casings, jumped 4.2 percent to NT$27.5, the highest since April 16, after JPMorgan Chase & Co. raised it to “overweight” from “neutral” on expectations margins will recover.

Wistron Corp. surged 6.5 percent to NT$51, the highest since May 27, 2008, after Macquarie Group Ltd. raised the target price of the world's third-largest maker of laptop computers by 44 percent.

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