Taipei, May 22 (CNA) The local bourse got a boost Tuesday amid renewed optimism toward the debt situation in Europe after the leaders of the G8 nations voiced support for Greece remaining in the eurozone, dealers said.
Ahead of a European Union summit Wednesday, investors have become more upbeat that European leaders will come up with concrete measures to deal with the debt problems, dealers said.
Buying in the local market focused on high tech stocks, in particular companies in the Apple supply chain, as bargain hunters took advantage of their relatively low valuations after a recent slump, dealers added.
The weighted index closed up 82.66 points or 1.14 percent at the day's high of 7,274.89, off an early low of 7,164.90. Turnover during the session totaled NT$65.71 billion (US$2.23 billion).
The market opened up 0.98 percent in a knee-jerk reaction to a rally on Wall Street and the gains posted on the European markets overnight as investors were relived to some extent after the G8 summit, dealers said.
Interest in electronics heavyweights was sustained until the end of the session, helping the broader market fend off sporadic profit taking during the session and pushing the index higher, they said.
"Basically, the local bourse was moving in line with its counterparts in the world," Hua Nan Securities analyst Henry Miao said. "As Wall Street staged a rebound, the local market simply followed."
Among the winning high tech stocks, Hon Hai Precision Industry, which assembles iPad and iPhone for Apple, rose 4.81 percent to end at NT$87.20 on turnover of 41.69 million shares as investors expect the Taiwanese supplier's bottom line to be boosted by the launch of the latest iPhone later this year.
Led by Hon Hai, casing maker Foxconn gained 2.04 percent to end at NT$100.00, and flat panel firm Chimei Innolux closed up 1.21 percent at NT$12.50.
However, Miao said he saw the latest gains on the local bourse as just technical in nature.
Although the upcoming EU summit has led many investors to think positively about the debt problems in the eurozone, the financial crisis is still far from over, he said.
"Turnover in the local market remained thin, making it unlikely for the index to score a breakthrough any time soon as many investors have taken to the sidelines," Miao said.
"There have been fears that Wall Street will suffer a pullback, which will affect the local bourse, especially if concerns over the European debt crisis return to haunt market sentiment," he said.
At the end of the session, the construction sector scored the highest gains among the eight largest sectors of the market, finishing up 1.92 percent. Machinery and electronics rose 1.44 percent, paper and pulp stocks gained 1.30 percent, and the plastics and chemical sector closed up 0.89 percent.
Financials rose 0.73 percent, textiles added 0.58 percent, cement stocks climbed 0.50 percent, and the foodstuff sector closed up 0.18 percent.
(By Frances Huang)