Taiwan stocks hit 1-wk closing high; LCDs rally

Published: 24 Nov 2009 22:26:42 PST

* LCD makers outperform on continued China hopes

* Quanta, Compal lead gains on stronger shipment forecasts

* Chinatrust flat after regulators scrap fundraising plan (Updates indexes, adds quotes and details)

TAIPEI, Nov 25 - Taiwan stocks rose 0.54 percent to hit a one-week closing high on Wednesday, supported by gains in LCD shares such as AU Optronics <2409.TW> on hopes of increased demand from China.

The main TAIEX share index <.TWII> finished up 41.75 points at 7,756.31, extending the previous session's gains and logging its highest close since Nov 19.

AU Optronics, the world's No.3 flat-panel maker, jumped 4.13 percent and was the second most-active stock by turnover, while the electronic sub-index <.TELI> rose 0.43 percent.

Turnover rose to T$125 billion ($3.88 billion) from Tuesday's T$113 billion as sentiment picked up after the U.S. Federal Reserve raised the United States' growth forecast for 2010.

"The strength of the economic recovery varies from country to country, and companies in Taiwan have been betting especially on the strong recovery in China," said John Chiu, a vice president at Fuh Hwa Securities Investment Trust.

LCD makers provided support to the broader technology sector on a newspaper report that the Taiwanese government could consider loosening restrictions on investments by LCD makers in China.

Chi Mei Optoelectronics <3009.TW> jumped 3.96 percent. The optoelectronics sub-index <.TOPI> rose 2.18 percent.

Other China-sensitive plays such as automobile shares also helped power gains in the main index, with Yulon Motors <2201.TW> up 1.36 percent after industry sources said on Wednesday two major Chinese automakers were looking to research and develop cars in Taiwan. [ID:nTP353821]

Financial shares <.TFNI> rose 1.13 percent, regaining strength following their recent losses.

But Chinatrust <2891.TW>, the island's largest credit card issuer, fell 0.5 percent after financial regulators in Taiwan turned down its plan to raise funds in a private placement. [ID:nGEE5AN1F5]

Contract laptop PC makers also gained, as a stronger outlook for the global economy fuelled hopes for a pick-up in demand for hi-tech devices, including personal computers.

Quanta <2382.TW> and Compal <2324.TW>, the world's two largest contract PC makers, rose 0.77 percent and 2.48 percent, respectively.

Quanta expected PC shipments in the first quarter of 2010 to fall less than previously projected, local media reported, while smaller rival Compal expects its shipments to rise by a more than expected 20 percent in the fourth quarter. [ID:nTP324615] [ID:nTP352333]

"Sales of LCDs and personal computers could see further growth as we step into the first quarter of next year, when demand in key markets like China warms up," said Andrew Deng, an assistant vice-president at Taiwan International Securities. ---------------------TAIEX IN PERSPECTIVE------------------

Move on day 0.54 pct

Close on day 7,756.31

2009 intraday high 7,875.48

2009 intraday low 4,164.19

All-time high 12,682.41 12 FEB 1990 ----------------------------------------------------------- ((Reporting by Joan Hsu; Editing by Jonathan Hopfner)) (

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