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Strong currency pushes Taiex higher

Strong currency pushes Taiex higher

Taiwan share prices closed 2.19 percent higher yesterday as the national currency's continued strength triggered hopes for a stock market boost from more capital inflows, dealers said.
Investors also took note of a firmer finish on Wall Street on Friday after a report that a bailout plan would be announced soon for troubled US bond insurer Ambac Financial, they said.
The weighted index closed up 177.60 points at 8,286.31, after moving between 8,228.92 and 8,307.75, on turnover of NT$165.39 billion (US$5.28 billion). Risers led decliners 1,526 to 454, with 341 stocks unchanged. A total of 105 stocks closed limit-up and 19 limit-down.
The cement sector was up 6.20 percent, textiles were up 5.49 percent and construction was up 4.15 percent. The food sector was up 3.55 percent, paper was up 3.47 percent and plastics/petrochemicals were up 2.30 percent. \\Financials and electronics were up 1.97 percent and 1.62 percent, respectively.
The New Taiwan dollar closed the morning at NT$31.270 against the U.S. dollar, compared with the previous close of NT$31.495.
"Investor zeal for buying equities was easily stoked as the local currency had another day of big appreciation," said Taiwan Life Asset Management assistant vice president Michael Hsu.
"There is good reason to believe that currency appreciation is precisely what our central bank has in mind," he said.
"Not trying to stop the currency from rising further will serve the dual purposes of curbing inflation and inducing capital inflows, mostly to equities."
The Taiwan dollar has been moving up lately on expectations that Taiwan will move towards closer economic ties with mainland China after the island's presidential election next month, he said.
Hsu said property-backed shares and others whose lifeline is domestic demand are likely to be the major beneficiaries of a thaw in relations with the mainland.
Semiconductor heavyweights were subdued, while flat panel display makers put in solid gains on expectations of their business turning up in the months leading to the Beijing Olympics, dealers said.
Taiwan Semiconductor Manufacturing Co. was up NT$0.30 at NT$61.20, while United Microelectronics Corp. was down NT$0.15 at NT$17.95.
AU Optronics was up NT$2.40 at NT$59.40 and Chi Mei was NT$1.70 higher at NT$42.00.
Cathay Financial was up NT$2.00 at NT$84.30 and Shin Kong Financial was NT$0.50 higher at NT$22.75.
Ten-year government bonds fell yesterday on concern rising share prices will lure investors away from debt.
"Bonds fell because of the stock market, where sentiment is quite good," said Jim Chen, a bond trader at International Bills Finance Corp. in Taipei.
The yield on the benchmark 2-3/8 percent bond due September 2017 rose 3.3 basis points to 2.411 percent, according to Gretai Securities Market, Taiwan's biggest exchange for bonds. The price fell 0.2773, or NT$277.3 per NT$100,000 face amount, to 99.6905.


Updated : 2021-06-14 06:01 GMT+08:00