TW Stock 07 Nov

14:21 07Nov2008 RTRS-Taiwan stocks close higher on financials

* Taiwan stocks reverse sharp losses to close higher
* Financials up on hopes of closer cross-strait ties
* Chip shares down ahead of export data

(Adds details, quotes)
TAIPEI, Nov 7 (Reuters) - Taiwan stocks reversed sharp losses
to close 1.03 percent higher on Friday, supported by financials
and talk of closer ties with China, but were weighed down by tech
shares ahead of export data later in the day.
The benchmark TAIEX index opened nearly 5 percent down but
later swung back into positive territory soon after China's top
envoy for Taiwan affairs Chen Yunlin left the self-ruled island
and its ensuing protests ended, calming investors.
The main TAIEX share index <.TWII> rose 48.21 points to close
at 4,742.33, led by the banking and insurance sub-index <.TFNI>,
which rose 3.36 percent.
"The market performed better than expected," said Michael On,
managing director of Beyond Asset Management.
"The European rate cuts and moves to shore up investor
confidence would all have helped the market somewhat today.
Anyway, valuations are still low right now and there will be
bargain hunting going on."
Turnover stood at T$67.2 billion ($2 billion), higher than
Thursday's session but nearly triple the average level of down
days in October.
Financial shares were the day's big winners, with leading
financial holding companies such as Chinatrust Financial
<2891.TW>, Fubon Financial <2881.TW> and Shin Kong Financial
<2888.TW> all closing between 2 and 4 percent higher.
Investors were cheered that Taiwan and China would begin
talks by the end of the year on liberalising their financial
sectors and allowing financial companies to set up branches in
each other's territory.
A landmark agreement establishing closer ties between Taiwan
and the mainland was also signed during Chen's visit, pushing
shares of airlines, shipping companies and hotels higher.
Shipping line Yang Ming Marine <2609.TW> was up more than 6
percent, China Airlines <2610.TW> was up more than 4 percent,
while Ambassador Hotel <2704.TW> rose by its daily maximum limit
of 7 percent.
Export-reliant top contract chip maker TSMC <2330.TW>
, the session's most active stock by turnover, fell 2.58
percent ahead of export data that is expected to show the biggest
decline in 20 months.
Shares in TSMC's smaller rival, UMC <2303.TW>, slid 3.38
percent after major client Qualcomm gave a disappointing
profit outlook. UMC reported a 22 percent fall in October
sales after the market closed.
Any revision in GDP forecasts and a potential rebound in
share prices that had fallen in recent weeks were cited by
analysts as next week's most pressing issues.
"The price of some shares, like Asustek <2357.TW>, have
fallen quite drastically this week," said Alan Tseng,
vice-president at Capital Securities.
"4,100 is the bottom for many analysts and so we don't see
the TAIEX trading at a level that is