TAIPEI (XFN-ASIA) - Share prices were firmer as tourism and transport stocks extended gains on the prospect that Taiwan and China will seal agreements on closer air and marine links early next month, dealers said.

The market managed to return to positive territory after a brief decline also because profit-taking on selected heavily weighted electronics stocks did not spread beyond the sector.

At 10.47 am, the weighted index was up 69.45 points or 1.48 pct at 4,753.09, off a low of 4,659.67 and a high of 4,802.78.

Turnover was 47.02 bln twd.

Dealers said construction and financial shares also gained ground on expectations they will benefit from talks between Taiwan and China in Taipei Nov 3-7.

Investors are betting Taiwan will move toward allowing Chinese investment in the local property market and letting Taiwan banks do business in the mainland.

The tourism sector was up 6.42 pct and transport was 5.52 pct higher.

The construction sector was up 5.97 pct and financials were up 5.49 pct.

Electronics was up 0.24 pct.

"The cross-strait lead takes over the spotlight as the boost from central bank rate cuts wanes," Taiwan Life Asset Management analyst Michael Hsu said.

But all in all, investors were simply content with a convenient pretext for justifying a further rebound after previous steep losses, he said.

"Take the bellwether electronics sector. Its gloomy outlook for the fourth quarter and beyond must be keeping investors from placing big bets."

How Wall Street fares next week will weigh as heavily as cross-strait talks on the local bourse, Hsu added.

Among tourism and transport shares, Formosa International Hotels gained 14.50 twd to 228.50, Ambassador Hotel rose 1.55 twd to 23.75, Evergreen Marine was 1.10 twd higher at 16.95 and Yang Ming Marine added 0.59 twd to 9.11. All four were limit-up 7 pct.

EVA Air was up 0.41 twd or 5.56 pct at 7.79.

Taiwan Semiconductor Manufacturing Co was up 1.10 twd or 2.45 pct at 46.00 after reporting earnings in line with expectations for the September quarter and giving a lackluster fourth-quarter outlook.

United Microelectronics was up 0.49 twd or 5.72 pct at 9.05.

Chip designer MediaTek was down 9.00 twd or 3.05 pct at 286.00 after forecasting a 9-16 pct revenue decline in the December quarter.

Chunghwa Telecom was up 1.50 twd or 2.95 pct at 52.40 after the island's largest telecom operator reaffirmed its full-year earnings forecast after a 3.3 pct drop in nine-month profit.

(1 usd = 32.80 twd)

philip.wang@afxasia.com - xfnpw/xfjamesa

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