TW Stock 30 Oct

14:15 30Oct2008 RTRS-Taiwan stocks post best day in 8 years on rate cut

* Market posts best day in eight years after rate cut
* Financials gain on hopes cut will boost lending
* Tech shares dominate, TSMC limit-up ahead of Q3 results

(Adds details, quote)
TAIPEI, Oct 30 (Reuters) - Taiwan stocks closed 6.29 percent
higher on Thursday, their biggest single-day percentage rise in
eight years, after investors buoyed by news of a rate cut bought
into shares such as Cathay Financial <2882.TW> and Shin Kong
Financial <2888.TW>.
The main TAIEX share index <.TWII> closed 277.12 points
higher at 4,683.64, its highest close in a week. The day's gain
was the biggest one-day percentage rise since Oct. 20, 2000.
The index opened up less than a percent but rallied quickly
to jump by more than 5 percent just over an hour into trading.
"The improved liquidity which results from any rate cut is
one of the reasons for today's rise," said Kevin Lin,
vice-president at Marbo Securities.
"The effect of the government's move to halve the down limit
to 3.5 percent has also worn off plus we are now clearer of each
company's prospects since most Q3 earnings have been released,"
Lin said.
The banking and insurance sub-index <.TFNI> closed 6.82
percent higher on hopes that the cut in the island's benchmark
discount rate would boost lending and improve liquidity.
Shares of leading financial holding companies Cathay
Financial, Fubon Financial <2881.TW>, Shin Kong Financial and
Taishin Financial <2887.TW> all rose by their 7 percent daily
limit.
"Current valuations for these companies are lower than what
they were in 2000. They should not drop for much longer because
of the really low prices now," said Andy Wu, an analyst at
Reliance Securities Investment Trust.
Technology shares also joined in the trek upwards as they
continued to dominate trading for a second day, hogging the top
four spots by turnover.
Tech bellwether and top chip maker Taiwan Semiconductor
Manufacturing Co (TSMC) <2330.TW> ended limit up, rising
for a third consecutive session, despite a bleak outlook by the
chairman of a local chip packaging firm.
After the market closed, TSMC posted a 0.7 percent rise in
quarterly profit on Thursday, hit by a slowing global economy
that has curbed spending on technology products. [ID:nTPU000813]
Its smaller rival United Microelectronics Corp (UMC)
<2303.TW> also went limit-up even after it reported its
first net loss in seven years and gave a bleak outlook for its
fourth-quarter wafer shipments on Wednesday.
The broader semiconductor sub-index rose <.TSII> 6.44
percent.