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Local market extends gains after Wall Street upturn

TAIPEI, Taiwan -- Shares in Taiwan continued to move higher Tuesday as investors were encouraged by the gains posted on Wall Street, where the Dow Jones Industrial Average returned to the 17,000-point mark overnight, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 48.87 points, or 0.51 percent, at 9,569.17 after moving between 9,547.94 and 9,593.68, on turnover of NT$112.66 billion (US$3.76 billion).

Financials Hit Post-2008 High

The financial sub-index closed up 1.91 percent at 1,099.69 points, hitting a new high since the 2008 financial crisis. The high-tech sector ended up 0.37 percent, lagging behind the broader market.

Accounting for 13.4 percent of the total turnover on the main board, the financial sector led the broader market to steam ahead with blue chip financial holding companies the focus of strong buying, they said.

On the back of the financial sector, the index moved closer to the 9,600-point market at one point before some investors pocketed their earlier gains to limit the uptrend at the close, they said.

Thanks to the financial sector, which has lagged behind the broader market to some extent, the local market continued an uptrend on active rotational buying, President Securities analyst Vickie Hsieh said.

Among the gaining financial stocks, Cathay Financial Holding Co. (國泰金控) rose 2 percent to close at NT$51.00, Fubon Financial Holding Co. (富邦金控) added 3.3 percent to end at NT$48.55, and CTBC Financial Holding Co. (中信金控) closed up 4.85 percent at NT$21.60.

The latest buying interest in local financial holding companies reflected several heavyweights reporting significant growth in their net profit for the first half of this year, they said.

FINIs' Best Pick

According to the TWSE, foreign institutional investors (FINIs) served as net buyers of 17.69 million shares of Yuanta Financial Holding Co. (元大金控), 14.86 million shares of CTBC Financial Holding Co., 14.56 million shares of Cathay Financial and 11.72 million shares of E. Sun Financial Holding Co. (玉山金控), the top four net buying amounts in the local market on Monday.

Foreign institutional investors also bought a net of 2.22 million Fubon Financial shares on Monday.

"In addition to the financial sector's relatively low valuation, investors appeared happy with its strong bottom line in the first half of this year," Hua Nan Securities analyst Henry Miao said.

Although the bellwether electronics sector still posted gains, it underperformed the broader market, as select high-tech heavyweights encountered some profit-taking to cap their gains after a recent strong showing, they added.

"The electronics sector had served as the anchor behind the recent strong showing on the main board. It was time for the sector to take a breather," Hsieh said.

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