* Taiwan dollar reverses gains to end weaker on fund outflows
* Dealers say central bank still wants a weak Taiwan dollar
(Updates closing values)
TAIPEI, April 16 (Reuters) - The Taiwan dollar reversed early gains to close weaker on Thursday as foreign funds bought U.S. dollars after taking in profits from the stock market's rally, and was further pressured by the greenback's global strength.
The Taiwan dollar
Volume on the main Taipei Forex Inc exchange was moderate at $1.1 billion, slightly higher than $1.02 billion in the previous session.
"Foreign funds were buying Taiwan dollars in the morning, but some of them started buying U.S. dollars instead, so that's why the local currency gave up so much of its gains," said a dealer in Taipei.
Taiwan stocks <.TWII> rose 2.08 percent to a seven-month closing high on Thursday.
A similar trend was seen on the offshore non-deliverable forwards (NDF) market. Six-month NDFs were quoted at -0.360/-0.310 compared to the morning's -0.430/-0.370, indicating the market expects the Taiwan dollar to strengthen by a lesser extent in half a year than previously expected.
Some dealers also cautioned that the central bank, which keeps the Taiwan dollar in a managed float and interferes in foreign exchange trading when it feels fluctuations are excessive, still wants a weaker local currency.
"The recent appreciation of the Taiwan dollar was driven by capital. But the central bank would still prefer a weaker currency for exports," said Renee Chen, an economist at Nomura Securities in Hong Kong.
On the smaller Cosmos exchange
(Reporting by Kelvin Soh, Yvette Chen and Ralph Jennings; Editing by Ken Wills)
((kelvin.soh@thomsonreuters.com; +886 2 2508 0815; Reuters Messaging: kelvin.soh.reuters.com@reuters.com))
((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: MARKETS TAIWAN CURRENCY/
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Thursday, 16 April 2009 17:07:37RTRS [nTP181450] {EN}ENDSteel rises on tie-up talks with Chinese rivals * Market turnover at highest since May 2008 (Adds details and quotes) By Gina Chang TAIPEI, April 16 (Reuters) - Taiwan stocks rose 2.08 percent on Thursday to a seven-month closing high, as financial shares such as Cathay Financial <2882.tw> rallied ahead of the potential signing of a financial cooperation with China later this year. The main TAIEX share index <.TWII> closed 121.98 points higher at 5,997.17, its strongest finish since Sept. 25, following solid gains on Wall Street overnight. Turnover was active at an 11-month high of T$173 billion ($5.1 billion), up from T$148.7 billion a day earlier. The financial sub-index <.TFNI> was the top advancer, closing the session 5.52 percent higher. Cathay Financial, Taiwan's largest-listed financial holding firm, and rival Chinatrust Financial <2891.tw> both jumped by their 7 percent daily limit. "There's a problem of overbanking in Taiwan. The potential signing of a memorandum of understanding (MOU) with China will be an important step for Taiwan's financial sector," said Karen Lin, a fund manager at Paradigm Asset Management Co. Taiwan and China will have preliminary discussions on Saturday in the run-up to official negotiations across the Taiwan Strait, which some local media said are likely to take place at the end of April. Such talks would iron out many of the details, including possibly those surrounding a financial MOU, expected to be the centrepiece of this round, allowing banks to invest across the Taiwan Strait. Separately, a Taiwan delegation, which includes chairmen of Cathay Financial and Fubon Financial <2881.tw>, will ask China to sign the Economic Cooperation Framework Agreement (ECFA) with Taiwan when the delegation meets Chinese Premier Wen Jiabao in Boao over the weekend, a local newspaper reported. However, analysts warned that investors should be cautious as the market has gained more than 32 percent since the beginning of March. "The market has gained a lot since March. There could be a huge and prolonged pull-back in the next few sessions," said Alex Huang, a vice president of Mega International Securities. Shares of Hon Hai Precision <2317.tw>, Taiwan's biggest electronics parts maker, rose 0.9 percent after saying it aimed a 30 percent rise in sales this year. [nTP249593] [ID:nLF573807] In the DRAM sector, shares rallied on rising spot prices. Powerchip <5346.two> and Nanya Tech <2408.tw>, Taiwan's top DRAM makers, ended limit-up. The semiconductor sub-index <.TSII> inched up 0.03 percent and the electronics sub-index <.TELI> advanced 1.4 percent. HOT STOCKS -- China Steel <2002.tw>, Taiwan's top steel maker, rose 5.64 percent after the firm said it was in talks with three of its top China peers to jointly invest in overseas miners. [ID:nTP168235] The steel and iron sub-index <.TSTI> gained 4 percent. --------------------TAIEX IN PERSPECTIVE-------------------- Move on day 2.08 percent Close on day 5,997.17 2009 intraday high 6,025.85 2009 intraday low 4,164.19 All time high 12,682.41 12 FEB 1990 ------------------------------------------------------------ (US$1=T$33.8) ((Editing by Ken Wills; gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters Messaging:gina.chang.thomsonreuters.com@reuters.com)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) 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] Gold.........[GOL/] Currency..[FRX/] Eurostocks...........[.EU] Oil...........[O/R] JP bonds...[JP/] ADR Report..........[ADR/] LME metals..[MET/L] US bonds...[US/] Stocks News US...[STXNEWS/US] Stocks News Europe...[STXNEWS/EU] DIARIES & DATA: IPO diary & data
For Related News, Double Click on one of these codes:[E] [Z] [MF] [PSC] [RNP] [DNP] [PTD] [PMF] [TW] [ASIA] [STX] [EMRG] [LEN] [RTRS] [.TW] [.TWII] [.MSTW] For Relevant Price Information, Double Click on one of these codes:<.TWII> <.MSTW> Thursday, 16 April 2009 14:05:47RTRS [nTP237946] {EN}ENDS
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