Taiwan stocks gain on economic recovery hopes

Feb 8, 2012, 9:20 GMT

Taipei - Taiwan shares gained 2.11 per cent Wednesday as positive industry news gave investors hope that the island can weather global economic headwinds.

The TAIEX index surged 162.47 points to close at 7,869.91. Since December 19, the index has added 19 per cent, but it still remains 10-per-cent down year on year.

The global economic slowdown caused by the European debt crisis and the weak US labour market led Taiwan into a technical recession in the fourth quarter. The government predicts the downturn will bottom out in the first quarter of 2012.

Industry news on Wednesday gave investors fresh optimism that a recovery could already be underway.

Taiwan's largest automaker and importer, Yulon Motor Group, forecast Tuesday that 2012 sales will increase by 25 per cent from 2011, with much of the growth coming from sales in China, according to a report from the Central News Agency. Yulon assembles cars under the Nissan brand, and also offers its own brand called Luxgen. Shares of Yulon ended 3.14-per-cent higher.

Rumours of a planned iPhone 5 launch in July, based on a report by Economic Daily News, sent shares of Apple Inc's suppliers soaring.

Apple products assembler Hon Hai Precision Industry, also known as Foxconn Technology Group, gained 4.32 per cent. Camera maker Largan Precision Co grew by 5.15 per cent, and casings maker Catcher Technology Co hit the maximum daily increase allowed by the exchange with an 6.95-per-cent rise.

HTC Corp gained 6.82 per cent to end at 548 Taiwan dollars per share. The company's share price tumbled Tuesday after it released a disappointing earnings outlook for the first quarter.

The US dollar closed at 29.53 Taiwan dollars, declining from 29.57 Taiwan dollars Tuesday. Demand for the Taiwan dollar has been robust since foreign investors bought more local stocks than they sold by 67 billion Taiwan dollars so far this year, according to data from the Taiwan Exchange. The Taiwan dollar has appreciated 3.9 per cent against the US dollar since October 4.