Taiwan: Stocks up on China rate cut; gains could be short-lived

[TAIPEI] Taiwan stocks were higher on Monday as a weekend rate cut in China sent Asian bourses up on hopes the move will bolster the flagging Chinese economy.

But the gains could be short-lived as the slowdown in China, the island's largest trading partner and the destination for 40 per cent of its exports, may not bode well for Taiwan.

The main TAIEX index was up 0.1 per cent at 9,701.72 as of 0143 GMT, giving back opening gains of more than 1 per cent. The index had closed down 0.12 per cent on Friday.

On Friday, data showed the island's exports in April, when factoring out Lunar New Year holiday distortion, fell the most since September 2009 on weak demand from China and Europe.

But for Monday, investors were piling back after four sessions of losses.

The electronics subindex was up 0.1 per cent, while the financial subindex was higher 1 per cent. The transport subindex was higher 0.5 per cent and the plastics subindex was 0.3 per cent ahead.

Among the actively traded shares, Shin Kong Financial was 1.9 per cent higher and chipmaker United Microelectronics was up 1.1 per cent.

The Taiwan dollar was up T$0.055 at T$30.710 to the US dollar.

REUTERS