Business

Thu May 29 02:29:35 PDT 2008

TAIPEI, May 29 (Reuters) – Taiwan stocks rose 0.2 percent on Thursday, rebounding from a near two-month low, led by gains in smartphone maker High Tech Computer (HTC) on hopes of stronger demand for its products.

The main TAIEX ended up 19.19 points at 8,684.92, but soft turnover of T$116.37 billion ($3.8 billion) reflected lingering concerns over high oil prices, which threaten corporate earnings and consumer spending.

"HTC is selling some higher-end phones and that’s a niche market," said Yuanta Securities analyst Kevin Chang.

HTC jumped 4.8 percent and Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s biggest contract chip maker, gained 0.2 percent.

They were the market’s two most actively traded stocks, helping lift the broader electronic sub-index 0.3 percent higher. Financials were up 0.8 percent.

"Bigger companies with better earnings prospects will attract buying interest but, overall, we don’t think sentiment will be very strong in the short term with such high oil prices," said Kevin Chung, manager at Jih Sun Investment Consulting.

However, investors shunned tourism and transport shares after recent gains inspired by hopes of closer trade ties with China.

The transport sector was off 0.8 percent, while the tourism sector dropped 3.2 percent even after Chinese President Hu Jintao pledged on Wednesday to give priority to launching weekend direct flights between China and Taiwan.

HOT STOCKS

– Chunghwa Telecom was flat after Taiwan’s cabinet said on Thursday the government would sell off more state shares in the island’s largest telecom carrier to raise money to fund a slew of projects.

(Reporting by Baker Li, Editing by Jonathan Hopfner)

Provided by Reuters

© Reuters 2008 All rights reserved