TAIPEI, Nov 9 (Reuters) - Taiwan stocks rose 0.99 percent to their highest close in more than a week on Monday, as gains on Wall Street raised confidence in economic recovery, while banking issues like Cathay Financial climbed on renewed hopes for warmer trade ties with China. The main TAIEX share index ended up 73.65 points at 7,536.70, its highest close since Oct 28. The banking and insurance sub-index, the session's top gainer, jumped 2.65 percent. Cathay Financial, the island's top listed financial holding firm, advanced 2.38 percent. 'The main index's gain was led by financial shares and MOU-driven,' said Bevan Yeh, a senior fund manager at Prudential Financial Securities. 'But the gains were less sharp than previously seen because the effect of an MOU (with China) has began to fade.' Turnover fell to T$77 billion ($2.4 billion) on Monday, the thinnest in more than a month, as mood turned cautious ahead of mayoral elections in major cities in early December. China was ready to sign a much-anticipated financial services memorandum with Taiwan, local media reported on Monday, citing a Chinese official. The memorandum, which will mainly cover cross-border financial supervision, will allow Taiwan's banks to tap China's massive market and pave the way for banks in Taiwan and China to invest in each other. A procurement group from China's Jiangsu province, which is expected to buy about $2 billion worth of electronic products, further lifted positive sentiment, analysts said. That news, combined with hopes that an MOU with China will be inked soon, boosted many China-related shares. Taiwan Cement , which has substantial investments in the mainland, was up 0.86 percent and China Petrochemical rose 3.2 percent. Technology shares HTC and AU Optronics also led mild gains on hopes of better business in the fourth quarter. Smartphone maker HTC jumped 2.04 percent and was the most-active stock by turnover. Brokerage house Macquarie upgraded the stock to 'outperform' from 'underperform' as HTC's high-priced, feature-rich products still appeal to the upper end of the smartphone market. HTC is scheduled to hold a third-quarter investor conference and give guidance for the fourth quarter later in the day. AU Optronics, the world's No.3 flat-panel maker advanced 0.67 percent after research houses iSuppli and DisplaySearch forecast strong sales in the fourth quarter. But smaller rival Chi Mei Optoelectronics ended the session 0.59 percent lower. 'LCDs could benefit from a boost in demand in the fourth quarter, but good sales are expected to have a limited impact on their share prices as they are already high,' said Prudential's Yeh. ---------------------TAIEX IN PERSPECTIVE------------------ Move on day 0.99 pct Close on day 7,536.70 2009 intraday high 7,811.92 2009 intraday low 4,164.19 All-time high 12,682.41 12 FEB 1990

Source