Taiwan shares rose on Friday after a record-breaking surge on Wall Street. On the Taiex, gains were seen in finance, old economy, and tech stocks, with chipmaker UMC and chip tester ASE each rising by more than 5%. The weighted index gained more than 1.7% to close above the 17,200 mark, on turnover of NT$452 and a half billion. Let''s hear from an analyst.

Chen Yi-kuang
First Capital Management Inc
This trading volume is enough to support both types of stocks. There are no problems there, so traders don’t need to be too anxious. Don’t think, “Electronics stocks have been on break for two weeks, so I should dump them and buy old economy stocks instead.” And then when old economy stocks fall, you sell off those to buy electronics stocks instead. I think there is no need for that. The trading strategy to go for at the moment is, if you’re optimistic about the fundamentals, then hold on. If capital doesn’t flow in over the short term, wait for the tide to come back and lift the boats.

The analyst said that cyclical capital flows have recently accelerated. Traders are advised to keep a diverse portfolio and avoid knee-jerk reactions to the market, to prevent unnecessary losses.