Taiwan shares log best gain in a mth, property plays up

* Construction shares lead gains on report of no tax rise

* TSMC wins lawsuit against SMIC, boosting stock

* Powerchip, Nanya surge on positive October sales (Updates indexes, adds quotes and details)

TAIPEI, Nov 4 - Taiwan stocks closed up 1.97 percent on Wednesday, logging the best daily gain in a month, as property shares such as Farglory <5522.TW> led gains on news the government will not levy higher property taxes in the near term.

The main TAIEX share index <.TWII> closed up 144.11 points at 7,467.04, snapping a six-session losing streak and rebounding from a one-month closing low hit in the previous session.

Turnover rose to T$98 billion from Tuesday's T$79 billion, the thinnest in a month, as some investors piled into financial shares that have suffered losses recently.

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 a higher property tax in near term as economic recovery remained on shaky ground.

Real estate developer Farglory surged 5.93 percent, while the construction sub-index <.TCOI> jumped 5.39 percent.

"Construction shares were the main force behind today's rebound as Premier Wu's comments removed concern about a possible rise in property taxes," said Vincent Ho, a fund manager at JP Morgan Asset Management in Taiwan. "Financial shares also got a lift as bankers were worried that a higher property tax could fend off potential home buyers."

Property shares have fallen about 9 percent over the past four sessions after Taiwan government officials voiced concer over skyrocketing housing prices and urged bankers to tighten rules on housing loans.

Cathay Financial <2882.TW>, the island's top listed financial holding company, rose 3.13 percent, with the banking and insurance sub-index <.TFNI> up 3.31 percent.

Taiwan is 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> up 0.68 percent and UMC <2303.TW> up 1.28 percenty. The semiconductor sub-index <.TSII> rose 1.28 percent.

Contract chipmaker TSMC <TSM.N> was further encouraged after it won a lawsuit against Chinese integrated circuit maker Semiconductor Manufacturing International Corp <0981.HK> over the theft of trade secrets and patent infringement. [ID:nN03520791]

The Semiconductor Industry Association said global semiconductor sales rose during the third-quarter and forecast upbeat full-year sales as chip demand increases along with unit sales of personal computers and cell phones. [ID:nBNG185611].

DRAM makers including Powerchip <5346.TWO> and Nanya Tech <2408.TW> were also in the spotlight -- both stocks surged nearly 7 percent on upbeat October sales and rising contract prices. [ID:nTP173792] ---------------------TAIEX IN PERSPECTIVE-----------------

Move on day 1.97 pct

Close on day 7,467.04

2009 intraday high 7,811.92

2009 intraday low 4,164.19

All-time high 12,682.41 12 FEB 1990 ----------------------------------------------------------

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