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Local market boosted by electronics, financials; closes at 9,231.31 points

TAIPEI--Shares in Taiwan moved higher Wednesday on a technical rebound as high-tech blue chips extended gains from a session earlier amid optimism that companies would benefit from peak season effects in the third quarter, dealers said.

The weighted index on the Taiwan Stock Exchange closed up 68.19 points, or 0.74 percent, at 9,231.31, after moving between 9,147.14 and 9,231.66, on turnover of NT$84.52 billion (US$2.82 billion).

Turnover Lacks Power

Mega International Investment Services Corp. analyst Alex Huang said that despite the rebound, market turnover failed again to rise significantly, holding back potential upward momentum.

“The market is faced with stiff technical resistance ahead of 9,200 points. Unless turnover expands to about NT$100 billion, it won't be easy for the local market to jump over the hurdle,” he said.

The market opened down 0.09 percent and fell further to the day's low in a knee-jerk reaction to a lackluster performance on Wall Street overnight, but buying soon emerged as the index moved closer to 9,100 points, sending it into positive territory, dealers said.

The financial sector, which had been a market laggard, also attracted buying on hopes that financial authorities in Taiwan and China can find more ways to boost exchanges across the Taiwan Strait at a meeting scheduled for later this year, they said.

In addition, bargain hunters picked up select old economy stocks to push up the index further, dealers said.

In the financial sector, Cathay Financial added 1.54 percent to close at NT$49.30, and E. Sun Financial Holding Co. (玉山金控) rose 1.27 percent to end at NT$20.00.

High-tech Sector Lends a Hand

Large-cap electronics stocks, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台灣積體電路) and Hon Hai Precision Industry Co. (鴻海精密), posted gains, and financial heavyweights, including Cathay Financial Holding Co. (國泰金控), trended higher to support the broader market, they said.

“After recent heavy losses, it was time for the local market to bounce back like this,” Huang said.

“The electronics sector served as a driver of the rebound as investors have high hopes that the sector will benefit from peak season effects in the current quarter.”

Among the winning high-tech stocks, TSMC, the most heavily weighted stock in the local market, gained 0.82 percent to close at NT$122.50. TSMC is believed to be supplying processors for production of the new iPhone.

Hon Hai, which assembles iPads and iPhones for Apple Inc., gained 1.44 percent to close at NT$106.00, and integrated circuit packaging and services provider Advanced Semiconductor Engineering Inc. (日月光半導體), whose major clients include Apple, rose 1.14 percent to close at NT$35.50.

“The buying in these Apple concept stocks reflected optimism in their shipments in the second half of this year because of Apple's launch of the next generation iPhone, likely in September,” Huang said.

IC designer MediaTek Inc. (聯發科) added 1.84 percent to end at NT$498.50 despite news that 10 former MediaTek employees may have been involved in the misappropriation of trade secrets.

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