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14:36 31Aug09 -Taiwan stocks end higher on Compal; banks curb gains * Compal gains after solid Q2 results * Investors eye Chinese stocks and the Dalai Lama's visit * Financials fall on fears China may call off trade deal * Evergreen falls before reporting second-quarter losses (Update indexes, adds comments) TAIPEI, Aug 31 (Reuters) - Taiwan stocks ended up 0.24 percent on Monday to a one-week closing high, with PC makers such as Compal <2324.tw> leading gains after strong quarterly earnings, but declines in Chinese stocks capped gains. The main TAIEX share index <.TWII> finished up 16.09 points at 6,825.95, its strongest close since Aug 24. Turnover was thin at T$85 billion ($2.58 billion), as worries of a possible cabinet reshuffle, the Dalai Lama's visit, as well as media reports playing up the threat posed by the H1N1 influenza kept investors on the sidelines. "Technology companies that reported market-beating earnings led gains," said Rayming Yu, CIO at Prudential Financial Securities Investment Trust. "These results also reassured investors that the economy is taking on a slow recovery." Compal Electronics, the world's No. 2 contract laptop PC maker, rose 1.53 percent, pushing the electronics sub-index <.TELI> 0.31 percent higher. A key supplier to top brands such as HP and Dell , it reported better-than-expected quarterly earnings on Friday, helped by robust demand for notebook PCs and LCD televisions. [ID:nTP304868] Mediatek <2454.tw>, Taiwan's top chip designer and supplier and also the session's second most active stock by turnover, outperformed the main board to rise 0.84 percent. The firm's gains come after Intel Corp , the world's largest chipmaker, raised its outlook for third-quarter revenue on stronger-than-expected demand for its microprocessors and chipsets. [ID:nN28172958] Other gainers included construction shares <.TCOI>, which rose over 4 percent as investors bought into property developers such as Farglory <5522.tw>, which climbed on reports that banking firms were increasing their property investments. Medical-related plays such as China Chemical and Pharmaceutical <1701.tw> also climbed, rising 3.16 percent after the local health authorities reported more cases of severe H1N1 influenza infection. Weighing on sentiment was a plunge in China stocks, with the Shanghai Composite Index <.SSEC> falling by over 5.5 percent on Monday. [ID:nBJD002974] "Taiwan stocks took its cue from Chinese stocks, which fell below a key support level, dragging down major Asian markets. In the long term, volatile Chinese stocks could post threat to the Taiwan market's stability." Yu said. China-sensitive financial shares such as Taiwan's top credit card issuer Chinatrust <2891.tw> slipped 2.66 percent, as investors feared that any pullback in warming cross-strait ties could hit the banking industry. This also comes amid a visit by Tibetan spiritual leader the Dalai Lama, raising fears that China could call off a highly anticipated economics agreement with the island. The broader banking and insurance sub-index <.TFNI> was down over 1 percent. HOT STOCKS -- Evergreen Marine <2603.tw> closed 0.5 percent lower. The world's fourth-largest container line reported a net loss of T$1.976 billion in the second quarter after the market close, beating market expectations. [ID:nTPU001635] --------------------- TAIEX IN PERSPECTIVE --------------- Move
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