June 29, 2010 / 2:53 AM / 10 years ago

Taiwan stocks up on China deal; chipmakers gain

TAIPEI (Reuters) - Taiwan stocks rose 0.8 percent on Tuesday, with manufacturers leading the way as Taiwan prepared to sign a landmark trade deal with China later in the day that will slash tariffs on exports.

Chipmakers gained after two top U.S. counterparts beat quarterly expectations, but transport firms reversed the previous day’s gain on profit taking.

Taiwan and China will sign the economic cooperation framework agreement (ECFA) today, opening the way for a major boost to trade. The government has been pushing the deal heavily and media reports cited President Ma Ying-jeou as saying the deal could add 2 percent to GDP. (See [nECFA] for more on the trade deal.)

“The ECFA is going to be signed today, and the president has said GDP would go up. It’s those two factors driving stocks upward,” said Eddy Chen, vice president, National Investment Trust Co.

The main TAIEX index .TWII was up 0.6 percent at 7,547.12 at 0217 GMT.

Formosa Plastics (1301.TW) rose 0.9 percent and rival Nanya (1303.TW) was up 1.1 percent.

Among chipmakers, Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW) rose as much as 1.1 percent following strong results from U.S. chip firms Micron (MU.O) [ID:nN2896882] and Standard Microsystems SMSC.O.

TSMC also received government permission to take a stake in Chinese rival Semiconductor Manufacturing International Corp (SMIC) (0981.HK).

Rival UMC (2303.TW) was up 0.3 percent.

Shipping firm Evergreen Marine (2603.TW) fell 2.4 percent, unwinding some of the previous session’s strong gains.

Reporting by Jonathan Standing; Editing by Jonathan Hopfner

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