Taiwan stocks up: China deal lifts banks, shippers

TAIPEI, June 28 (Reuters) - Taiwan stocks rose 0.4 percent on Monday, with banks, insurance and shipping companies in the lead on optimism they will benefit from a landmark trade deal with China to be signed this week.

The economic cooperation framework agreement, or ECFA, gives preferential treatment to Taiwan banks in setting up operations in China and removes tariffs from hundreds of Taiwanese products exported to the mainland (see [nECFA] for full details).

Taiwan and China will also discuss an accord for insurance firms in follow-up talks to the ECFA deal.

The banking sub-index .TFNI rose 1.3 percent and transport .TTPI rose 2.7 percent, with the index for plastics companies -- also set to benefit from lower tariffs -- up 0.9 percent.

"Financial shares are particularly strong as the ECFA comes up because banks hope they can do renminbi business at an early date in China," said Michael On, managing director at Beyond Asset Management. "Marine shipping stocks are also expected to gain this week, hoping to see more goods shipped between China and Taiwan."

The main TAIEX index .TWII was up 0.4 percent at 7,504.05 at 0148 GMT.

Among banks, Chinatrust Financial (2891.TW) was up 1.4 percent. Among insurers, Union Insurance (2816.TW) and First Insurance (2852.TW) jumped by the daily limit of 6.8 percent, while Taiwan Life (2833.TW) was up 1.5 percent.

Shipper Evergreen Marine (2603.TW) jumped 5 percent and Yang Ming Marine (2609.TW) was limit up with a 7 percent gain. Formosa Plastics (1301.TW) advanced 1.4 percent. (Reporting by Jonathan Standing)