Taiwan stocks closed up 0.71 percent on Friday as UMC led a rebound from the last session's fall after the firm's chairman issued a flat denial of illegal connections to China's HeJian Technology Co Ltd. The main TAIEX share index ended up 43.27 points at 6,115.43, recouping much of the 1.2 percent it lost on Thursday. Turnover was flat with Thursday at T$86.4 billion, reflecting the cautious mood. The index has gained about 6 percent since late January as investors bet that the battered tech industry could hit bottom soon.

United Microelectronics Corp (UMC) the world's second-largest contract chipmaker and the market's most active issue, finished up 2.51 percent at T$20.40, helping the heavily weighted electronics sub-index 1.43 percent higher.

The gains came after Chairman Robert Tsao published a feisty statement rejecting prosecutors' allegations UMC may have violated Taiwan laws restricting investment in China.

A Taiwan court also released HeJian's chairman, a Taiwan citizen, on bail on Thursday, turning down prosecutors' requests to detain the executive.

Meanwhile, the optimism spread to the display sector after AU Optronics Corp said on Thursday that screen prices are stabilising and it expects to utilise 95 percent of its capacity in the current quarter, up from 75 percent in the last quarter.

Shares in AU rose 1.45 percent to T$49.00 and those of smaller rival Chi Mie Optoelectronics Corp added 1.08 percent to T$46.70.

Synoptic Financial was another winner, rising 1.62 percent to T$18.80 after saying on Thursday it was in merger talks with smaller rival International Bank of Taipei (IBT) However, IBT was off 0.83 percent at T$24.00.

The over-the-counter market's TAISDAQ index jumped 2.03 percent to 118.61, and March TAIEX index futures finished up 0.69 percent to close at 6,120.

Copyright Reuters, 2005