The bellwether electronics sector led the gains as Apple beat market expectations to report stronger-than-expected results for the quarter that ended in June, they said.
Smartphone maker HTC rebounded from its recent sell-off after Google voiced support for the local company, which has been found by the U.S. International Trade Commission in an initial ruling to have infringed on two Apple Inc. patents, they said.
The weighted index closed up 181.60 points or 2.13 percent at the day's high of 8,706.17, off a low of 8,612.53, on turnover of NT$133.69 billion (US$4.63 billion).
The local market opened up 1.17 percent as investors resumed buying in high tech stocks, and momentum continued and spread across the board after other markets in the region extended gains amid improving sentiment on the overnight Wall Street rally, the dealers said.
The machinery and electronics sector scored the highest gains, finishing up 2.9 percent. Financials rose 1.6 percent, paper and pulp stocks added 1.5 percent, cement shares grew 1.4 percent and the foodstuff sector closed up 1.1 percent.
Plastics and chemicals gained 0.9 percent, textiles rose 0.8 percent and the construction sector ended up 0.5 percent.
"Today's electronics-driven rebound came as no surprise, in particular after Apple reported strong earnings," Hua Nan Securities analyst Stan Chang said.
"A group of local high-tech stocks, which are in Apple's supply chain, attracted large buying, helping the sector recoup some of its recent losses," Chang said.
Among these Apple "concept" stocks, battery firm Simplo rose 7 percent, the maximum daily gain, to close at NT$255.50, while Hon Hai Precision, which assembles iPads and iPhones for Apple, rose 4.60 percent to end at NT$93.20.
HTC closed up 7 percent at NT$872.00 on speculation that Google might assume a share with the local smartphone maker, which is one of the U.S. firm's Android operating system users, of compensation for Apple if the ITC final decision upholds the initial ruling.
The market perceives the litigation against HTC as a fight between Apple and the Android camp, the dealers said. Despite the gains, Chang called for an alert over the technical resistance ahead of 8,750 points.
"The U.S. economic data will continue to dictate Wall Street, where fluctuations will affect markets around the globe," Chang said, referring to home sales and weekly jobless benefit claims due later this week (source ; http://focustaiwan.tw )
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