Taiwan stocks gain 3.24% on foreign buying

Asian Economic News, Nov 13, 2000

TAIPEI, Nov. 8 Kyodo

Taiwan stock prices rose 3.24% Wednesday, recovering above the critical 6,000 mark, on continued heavy buying by foreign investors and improved sentiment in the wake of Morgan Stanley Capital International (MSCI) Inc.'s decision to increase the weighting of Taiwan stocks in its indexes.

The Taiwan Stock Exchange Weighted Index (TAIEX), which opened higher, rallied strongly but lost some of its gains in late trading due to profit-taking to close at 6,067.94, up 190.17 points or 3.24%.

Turnover was high at NT$124.344 billion compared to Tuesday's final tally of NT$101.477 billion.

A total of 3,008,395 lots of 1,000 shares changed hands compared with 2,373,854 lots traded Tuesday.

Foreign investors have been net buyers in the local bourse throughout this month, buoying sentiment and boosting trading volume.

MSCI's reweighting of Taiwan stocks from 65% of their market capitalization to 80% is expected to be felt in the market for some time.

On Wednesday, many electronics and finance stocks included in MSCI indexes rose by 7%, the maximum allowed daily upward movement.

Wednesday was also the first day that the daily limit down was restored to 7%, up from 3.5%. The government halved the downward limit last month to prevent a selling panic after the opposition parties threatened to recall President Chen Shui-bian over his government's decision to scrap a controversial nuclear plant.