(Recasts with details, analyst quotes) 
    By Baker Li 
    TAIPEI, March 24 (Reuters) - Taiwan markets rallied on 
Monday, the first trading day after the opposition scored a 
resounding win in the presidential election, as investors hoped 
for better trade ties and less political tension with China. 
    Taiwan's main TAIEX <.TWII> soared 6.15 percent at the open 
-- its biggest one-day percentage gain in more than seven years 
-- before easing back to a gain of 4.22 percent, or 359.67 
points, at 8,884.66 as of 0152 GMT. 
    The Taiwan dollar <TWD=TP> also jumped to a 10-year high of 
T$30.258 against the U.S. dollar, and is now up nearly 7 percent 
so far this year. 
    Some analysts predicted the stock market would punch through 
the 9,000 point mark after the victory by Nationalist Party (KMT) 
candidate Ma Ying-jeou, who favours closer trade ties and 
political dialogue with China, which considers self-ruled Taiwan 
its own territory. 
    But many added that the current euphoria should be relatively 
short-lived. 
    "This passion rally should only last for around two days," 
said Alex Huang, vice president of Mega Securities. 
    "Since Ma won't take the post until May, investors could 
start to pull back as the U.S. economy is still weak, oil prices 
are still high and the Taiwan dollar's rise will hurt some major 
exporters," said Huang, who expects the TAIEX market to trade 
between 8,650-9,200 points this week. 
    Despite turmoil in global markets, the TAIEX had risen 
slightly so far this year before the Monday rally on optimism 
over the election, even as the Dow Jones <.DJI> industrial 
average in the United States has fallen 6.8 percent. 
    All sectors rose on Monday, with top carrier China Airlines 
<2610.TW>, top financial holding company Cathay Financial 
<2882.TW>, and tourism <.THOI>, construction <.TCOI> and 
China-related shares leading the market to its highest level in 
nearly five months. 
    All of those sectors could benefit from closer ties with 
China, which has already received some $100 billion in Taiwan 
investment in the last 20 years and is the favourite 
manufacturing destination for Taiwanese firms. 
    In the longer term, more funds will flow into Taiwan as the 
KMT's dominance in the parliament and cabinet will make it easier 
for the government to push through its economic agenda after 
years of stalemate in a once-divided legislature. 
    JPMorgan said in a note that foreign investors had remitted a 
net $11.8 billion into Taiwan in the year through March 7 and had 
bought a net $2.5 billion worth of equities in Taiwan companies, 
with the possibility for another $5.7 billion to enter the market 
later. 
    (For a table of foreign trading in Taiwan stocks, 
double-click on [ID:nTP170358]) 
    Foreign fund inflows could keep supporting the local dollar. 
    "Today's trading volume was huge and that's because of 
(demand for Taiwan dollars from) exporters and foreign funds," 
said one dealer at a foreign bank in Taiepi.  
    But the dealer said the market will be closely watching to 
see whether Taiwan's central bank will intervene to slow the 
Taiwan dollar's rise at around T$30.200-T$30.250. 
 (Reporting by Baker Li, Sheena Lee and Rachel Lee; Editing by 
Doug Young and Ken Wills) 
 (([email protected]; +886 2 2508-0815; Reuters messaging: 
[email protected])) 
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    LIVE PRICES & DATA: 
 World Stocks          <0#.INDEX>  Currency rates  <EFX=> <NFX=> 
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Keywords: MARKETS TAIWAN