Taiwan stocks rebound; construction, tech plays gain

* Construction shares lead gains on report of no tax rise

* Technology shares recoup losses after gains by U.S. peers

* Investors cautious ahead of U.S. Fed meeting (Updates indexes, adds quotes and details)

TAIPEI, Nov 4 - Taiwan stocks rose 1.07 percent on Wednesday, as construction plays led a rebound from a one-month closing low on Tuesday, on news that the government will not levy higher property taxes in the near term.

As of 0200 GMT, the main TAIEX share index <.TWII> had climbed 80.41 points to 7,403.34.

"Taiwan stocks followed regional peers on a technical rebound," said Tom Tang, a vice-president at Masterlink Investment Advisory. "This could turn into a more sustainable gain if turnover picks up later in the day."

Construction shares rebounded from sharp falls over the past two sessions after a local newspaper reported that Taiwan's Premier had said the government would not levy higher property taxes until the economic recovery gained strength.

Real estate developer Farglory <5522.TW> was up 2.52 percent, while the construction sub-index <.TCPI> had jumped 2.96 percent.

Cathay Financial <2882.TW>, the island's top listed financial holding company, rose 1.39 percent, with the banking and insurance sub-index <.TFNI> up 1.16 percent.

Taiwan expected to sign a much-anticipated financial services pact with China within the month, a Taiwan government official said on Tuesday. [ID:nTP166124]

Technology majors also joined the main board's rise, with TSMC <2330.TW> rising 0.51 percent and Mediatek <2454.TW> up 0.93 percent. The gains followed strong performances by some of their U.S. peers, analysts said.

TSMC was further encouraged after it won a lawsuit against China's SMIC for theft of trade secrets and patent infringement. [ID:nN03520791]

Smaller rival UMC <2303.TW> jumped 1.28 percent, shrugging off Morgan Stanley's downgrade on the semiconductor sector and chip giant Intel Corp. on increasing inventories.

Analysts said Taiwan stocks may continue to trade in a tight range as investors awaited comments from the U.S. Fed Reserve on the global economic outlook.

HOT STOCKS

-- Yulon Motor <2201.TW> jumped 3.2 percent after a newspaper reported that the Yulon group was likely to assemble and sell cars for China's Geely Motor in Taiwan by the end of the year, with a selling price of T$400,000 per unit.

For a table of foreign trading in Taiwan stocks, double-click on ID:nTP170358