TW market 1125

14:19 25Nov2008 RTRS-Taiwan stocks, led by TSMC, hit week-closing high

* Reports of cross-strait MOU boost financial issues
* Chinatrust limit-up after ex-vice chmn returns to Taiwan
* Hon Hai gains despite downgrade
(Adds details, quote)
TAIPEI, Nov 25 (Reuters) - Taiwan stocks rose 2.55 percent on
Tuesday to close at their highest level in a week, led by
heavyweight TSMC <2330.TW>, as a Wall Street rally eased investor
worries about weak technology exports to the United States.
Banking shares also rallied on hopes a cross-strait agreement
might brighten the industry's outlook.
The main TAIEX share index <.TWII> ended 105.95 points higher
at 4,266.49, giving up earlier gains and ending at its strongest
finish since Nov 19.
But the market lagged some of its regional peers as caution
remained over the island's economic outlook after Taiwan on
Monday posted dismal October export orders and jobless data.
Turnover remained thin at T$57 billion ($1.7 billion), but
higher than T$45.8 billion a day earlier.
"Though the market rose today, its gain was smaller than
expected after Wall Street's steep rise. It showed that the
market remained conservative," said Alex Huang, vice president of
Mega Securities.
A Wall Street rally propped up the electronics sub-index
<.TELI> by 3.89 percent, with Taiwan Semiconductor Manufacturing
Co (TSMC) , the world's top chip maker and the day's most
active share by turnover, jumping by its daily 7 percent limit.
The financial sub-index <.TFNI> surged 4.65 percent, as it
got a boost from local media reports that said Taiwan's top
financial regulators would submit a draft memorandum of
understanding (MOU) on the financial industry during their visit
to Beijing this week. [ID:nTP50137]
"It's a long-term positive factor as there will be more
investments in Taiwan, but it's hard to say if the news can keep
propping up gains in financial stocks in the short term. The
market is very volatile now," said Chang.
Chinatrust Financial <2891.TW>, the island's top credit card
issuer, jumped by its 7 percent limit for the second session.
The rally came after Jeffrey Koo Jr., the firm's former vice
chairman, returned to Taiwan from Japan to be questioned by
prosecutors as oart of a graft probe. [ID:nTP56263]
Despite the gains, concerns over the island's economy
lingered after Taiwan's export orders posted their biggest fall
in seven years in October. Taiwan also said the October
seasonally adjusted jobless rate rose to 4.29 percent, the
highest since Feb. 2005. [ID:nTP24985] [ID:nTPU000886]

HOT STOCKS
-- The construction sub-index <.TCOI>, the biggest winner of
the day, jumped 4.83 percent after a local newspaper said Taiwan
Premier Liu Chao-shiuan would meet representatives from the real
estate industry to discuss measures to boost the sluggish sector.

-- Hon Hai Precision <2317.TW>, Taiwan's top electronics gear
maker, also followed strong gains on Wall Street and advanced
4.38 percent.
Hon Hai's rise came even after Deutsche Bank cut its target
price on Hon Hai to T$65 from T$145, saying deteriorating demand
would hurt sales. [ID:nTP21141]

-- China Steel <2002.TW>, Taiwan's top steel maker, fell 1.56
percent on media reports the firm would not stop production
unless necessary, despite falling steel prices.

-- Waterland Financial <2889.TW> gained 4.95 percent. Chinese
banks have expressed interest in Waterland's plans to raise T$550
million by selling a 20 percent stake in the company, if the
cross-strait financial MOU is signed, a local newspaper reported.
--------------------TAIEX IN PERSPECTIVE--------------------
Move on day 2.55 percent
Close on day 4,266.49
2008 intraday high 9,309.95
2008 intraday low 3,955.43
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
For a table of foreign trading in Taiwan stocks, double-click
on [ID:nTP170358]
(US$1=T$33.4)
(Reporting by Gina Chang; Editing by Nick Macfie)
(gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging: gina.chang.reuters.com@reuters.net))
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia......[STXNEWS/AS] Japan........[.T] S.Korea....[.KS]
S.E. Asia............[.SO] Hong Kong...[.HK] Taiwan.....[.TW]
Australia/NZ.........[.AX] India.......[.BO] China......[.SS]
OTHER MARKETS:
Wall Street...........[.N]