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Local bourse boosted by stimulus in EU

TAIPEI -- The local bourse staged a rally to close at the day's high Friday on improved sentiment after the ongoing summit of the European Union hammered out an agreement on a 120-billion-euro (US$150 billion) stimulus package to boost the regional economy, dealers said.

The buying also came after the EU summit agreed to ease repayment rules for emergency loans to ailing Spanish banks which are seeking rescue funds for recapitalization, they said.

“The rally showed many investors have been relieved to some extent,” Grand Cathay Securities analyst Mars Hsu said. “They rushed to hunt for bargains after recent consolidation in share prices.”

The weighted index closed up 126.67 points or 1.76 percent at the day's high of 7,296.28, off an early low of 7,177.59, on turnover of NT$65.47 billion (US$2.19 billion).

The market opened up 0.23 percent amid lingering concerns over the debt problems in the eurozone, but buying accelerated to vault the index past the 7,200 point mark after investors took cues from the agreements on a stimulus package and the eased rules for emergency lending to Spain's banks, dealers said.

Financial stocks attracted more interest due to reduced worries over the debt situation in Europe, while large cap stocks in both high-tech and old economy sectors were boosted by bargain hunting by the end of the session.

In the financial sector, Fubon Financial rose 2.58 percent to close at NT$29.80, and Cathay Financial gained 2.09 percent to end at NT$29.25.

Among the winning high-tech stocks, United Microelectronics Corp. added 7 percent, the maximum daily increase, to close at NT$12.90, while rival Taiwan Semiconductor Manufacturing Co. rose 1.75 percent to end at NT$81.30.

Touch panel maker Wintek closed up 2.84 percent at NT$16.30 after the company announced it has secured orders to provide screens for Google's Nexus 7 tablet computer production.

At the end of the session, the foodstuff sector scored the highest gains among the eight major sectors of the market, finishing up 2.88 percent. Financials rose 2.16 percent, plastics and chemicals gained 1.98 percent, and machinery and electronics closed up 1.65 percent.

Textiles rose 1.29 percent, cement stocks added 1.11 percent, paper and pulp shares gained 0.79 percent, and the construction sector closed up 0.24 percent.

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