Local bourse closes up in last session of year

The annual growth brought the stock market's overall value to NT$21.3 trillion, compared to NT$19.22 trillion for 2011.

The last-day rally followed a Wall Street rebound overnight on hopes that the White House and lawmakers will move with more urgency to resolve a looming fiscal cliff in Washington, dealers said.

Dealers generally believe that Taiwan's bourse is likely to see a further rally when it reopens on Wednesday.

The weighted index closed up 51.90 points after moving between 7,665.04 and 7,708.31, on turnover of NT$70.15 billion.

The financial sector, led by heavyweight Fubon Financial Holding Co., which had just announced a NT$30 billion deal to buy a China-based bank, attracted rotational buying on the last day, dealers said.

The market also received a boost from HTC Corp., which built on Thursday's rally to breach the NT$300 mark amid optimism over sales of the smartphone vendor's latest Butterfly model, they said.

After the index breached the 7,700-point level in early trading, profit-taking set in to limit the market's gains, but interest in large-cap stocks in the financial and high-tech sectors picked up to keep the index well above the previous day's close, dealers said.

“I suspect buying largely came from the government-led funds to acquire market heavyweights in a bid to give a boost to the broader market and shore up investor confidence,” Horizon Securities analyst Benson Huang was cited by the Central News Agency as saying.

In the financial sector, Fubon Financial gained 2.48 percent to close at NT$35.10. The holding company and its wholly owned subsidiary Taipei Fubon Commercial Bank will spend a total of NT$30.6 billion to a majority stake in China-based First Sino Bank.

Dealers expect Fubon to capitalize on First Sino's existing business network to expand its reach in the China market.

China Life Insurance gained 1.98 percent to close at NT$26.20, while Taishin Financial rose 1.32 percent to reach NT$11.55.

In the high-tech sector, the global number one contract chip-maker Taiwan Semiconductor Manufacturing Co. climbed 1.46 percent to close at NT$97.00, while HTC rallied 1.52 percent to end at NT$300.50.

“Because of the popularity of HTC's Butterfly model, it's possible that the company will post further gains as many institutional investors have resumed buying the stock,” Huang was cited as saying.

Huang observed that the local bourse has become technically healthier following Friday's upward surge, and he believes the index could challenge the 7,700-point mark again after the New Year's break because of the high level of liquidity in the market.

“As long as no negative leads emerge from the fiscal cliff negotiations in Washington over the next few days, buying interest in local shares is likely to continue,” Huang said.

For 2012, the Taiwan stock market gained 627.42 points, or 8.87 percent. Some observers summarized the annual growth by noting that each stock investor in Taiwan on average gained NT$230,000 in 2012.

The local bourse is expected to finish in the middle of the pack among markets in East Asia, according to the CNA.

Seoul's KOSPI will finish with similar gains as Taiwan's market, having risen 9.4 percent for the year as of Friday.

But the Hang Seng Index in Hong Kong and the Nikkei 225 in Tokyo will finish well ahead of the local bourse, having gained nearly 23 percent in 2012 as of Dec. 28.

The SSE Composite Index in Shanghai will finish as the weakest of indexes in the region, having gained only 1.5 percent so far this year.

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