Taiwan share prices closed 0.78 percent higher yesterday on the island's warming ties with rival China despite profit-taking following a recent rally, dealers said.
The weighted index rose 49.54 points at 6,379.94 on turnover of NT$213.44 billion (US$6.45 billion).
Losers outnumbered gainers 1,393 to 915, while 95 stocks remained unchanged.
A total of 192 shares surged to their daily 7.0 percent limit, against 68 limit-down.
The market opened high but profit-taking emerged after the market soared 4.89 percent Friday and added another 5.64 percent Monday.
"Ample liquidity has been leading the rally, and it is not going to come to an end any time soon as long as the Taiwan dollar keeps appreciating against the U.S. dollar," said Steven Huang of President Securities.
The U.S. greenback closed near a four-month low of NT$33.085 at the end of the morning session.
Foreign institutional investors, eager to build up their portfolios after overselling their shares last year in the global financial crisis, were targeting big-cap shares, analysts said.
MediaTek Inc was limit-up at NT$394.
Financials led the market with a 4.67 percent rise. Cement added 4.62 percent, textiles rose 2.87 percent and electronics edged up 0.14 percent. Taiwan Semiconductor Manufacturing Co was 1.69 percent lower at NT$58 while rival United Microelectronics Corp rose 5.66 percent at 14.0.