Breaking News, World News and Taiwan News.

Taiwan stock index jumps 5.6 percent ahead of economic stimulus package

TAIPEI, Taiwan -- Taiwan shares soared Monday as investors took cue from a planned government package to stimulate the sagging economy.

News of the bailout of U.S. mortgage giants Freddie Mac and Fannie Mae also boosted sentiment.

The Weighted Price Index of the Taiwan Stock Market rose 351.41 points, or 5.6 percent, to close at 6658.69 points.

Taiwan's benchmark share index has dropped 26 percent this year, with a downturn in the global economy cutting demand for the island's high-tech exports. Last week alone, the index plunged 10 percent.

Leading financial and high-tech companies rose sharply on Monday. Taiwan Semiconductor Manufacturing Company gained 6.9 percent to close at NT$56.7.

Over the weekend, Premier Liu Chao-shiuan said domestic demand-boosting measures taken by the government could help spur an upturn in the economy in the fourth quarter.

The Cabinet is expected to approve an economic stimulus package on Thursday.

On Monday, Finance Minister Lee Shu-teh said the government would also consider demands to cut securities trading taxes and income taxes as part of an overall tax reform.

"The planned government measures have renewed investors' confidence," said Tsai Chung-yuan, a manager of E-Invest Securities. "But the upward trend may not sustain unless both mainland Chinese and U.S. shares stabilize."

The Taiwan currency gained support from the rising share prices. By noon Monday, the New Taiwan dollar rose to 31.59 to one U.S. dollar from 31.87.

Subscribe to The China Post and save 25%. Click here