* Hon Hai and Asustek limit up as investors look for bargains
* Chi Mei limit up on share buyback
* Powerchip gains more than 6 percent on merger talk
(Adds details, quotes)
By Kelvin Soh
TAIPEI, Nov 21 (Reuters) - Taiwan stocks closed 1.98 percent
higher Friday, as investors scoured the market for beaten down
stocks like Hon Hai <2317.TW> and Asustek <2357.TW>, even as the
economy unexpectedly shrank in the third quarter.
The main TAIEX share index <.TWII> closed 81.17 points higher
at 4,171.10, after a wave of selling that saw it breach the key
4,000 psychological barrier and hit a fresh six-year low in
morning trade.
It was also the first time the market has closed in positive
territory this week.
"The market has fallen by a lot in the past number of days
and it's about time there was some sort of rebound," said Kevin
Chung, a fund manager at Jih Sun Securities.
"It doesn't fall in a straight line. We usually see it
falling by about 100 to 200 points, rising by a little, then
falling back down again."
Turnover stood at T$51.8 billion ($1.55 billion), the highest
this week.
"There's been a bit of an overreaction in the kind of falls
seen this past week," said Alvin Teng, a research manager at
Sinopac Securities.
"The market could rise next week on the back of a technical
rebound and if there are no fundamental changes in the U.S.
market within the next couple of days."
Hon Hai and Asustek both shrugged off fears of dampened
consumer demand amid the global financial crisis to rise by their
daily 7 percent limit, having closed at multi-year lows the
previous session.
Other tech shares joined in the rally with top LCD maker AU
Optronics <2409.TW> and contract PC maker Wistron <3231.TW> both
climbing by more than 6 percent.
Contract laptop PC makers Quanta Computer <2382.TW> and
Compal Electronics <2324.TW> also reversed early losses to gain
more than 2 percent each after Dell
quarterly results.
LCD maker Chi Mei Optoelectronics <3009.TW> rose by its 7
percent daily limit after the company said it would spend up to
T$6 billion on a share buyback. [ID:nTP8249]
Top DRAM maker Powerchip <5346.TWO> also rose despite its
weak financial results in the past few quarters, climbing 6.61
percent after it said it could consider a merger with Japan's
Elpida Memory <6665.T>. [ID:nTP5504]
On the down side, the plastics sub-index <.TPLI> led losses
to close 5.14 percent lower after Goldman Sachs put out a
research report downgrading Formosa Plastics <1301.TW>, Nanya
Plastics <1303.TW> and Formosa Chemicals and Fiber Corp <1326.TW>
to a sell.
A ban on short-selling to stop market volatility by the
Financial Supervisory Commission has also hit trading volume,
some analysts say, with some suggesting they expect the ban to be
lifted this weekend instead of the original year-end deadline.
"That's really the biggest issue that could affect the market
next week," said Bevan Yeh, a fund manager at Prudential
Securities Investment Trust.
"If the ban is lifted, there could be some fear of the market
sliding further, but this is good in the long run because it
allows things to run their natural course."
--------------------TAIEX IN PERSPECTIVE--------------------
Move on day 1.98 percent
Close on day 4,171.10
2008 intraday high 9,309.95
2008 intraday low 4,089.93
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
For a table of foreign trading in Taiwan stocks, double-click
on [ID:nTP170358]
(Editing by Jonathan Hopfner)
((kelvin.soh@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging:kelvin.soh.reuters.com@reuters.net))
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Friday, 21 November 2008 14:33:44RTRS [nTP22303] {EN}ENDS
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