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Taiwan shares pull back on renewed eruozone debt concerns

Taiwan shares pull back on renewed eruozone debt concerns

Taipei, Nov. 30 (CNA) Taiwan share prices made a pullback Wednesday, snapping a two-day winning streak, due to renewed concerns over the debt problems in the eurozone after Standard & Poor's downgraded the credit ratings on 37 of the largest banks in the world, dealers said. The S&P downgrades prompted investors to dump local financial stocks amid fears that the current financial turmoil would further squeeze the global financial sector's bottom line, while the spikes in the government bond yields in Italy raised concerns over the escalation of the debt crisis, they said. China concept stocks, which have close business ties with the mainland, also trended lower amid cautious sentiment ahead of the release of China's manufacturing activity data later this week, they added. "As the local bourse remained overshadowed by these unfavorable external factors, confidence appeared very weak," Horizon Securities analyst Benson Huang said. "Therefore, the gains posted in the past two sessions failed to drive investors to buy more and push the index higher." The weighted index closed down 84.53 points or 1.2 percent at 6,904.12, after moving between 6,860.05 and 7,001.59, on turnover of NT$93.87 billion (US$3.09 billion). The market opened 7.4 points and then reversed the losses with the index briefly breaching the 7,000 point mark due to a higher Wall Street overnight, dealers said. However, profit taking followed in to drag down the index as investors took cues from the declines suffered by other markets in the region with sentiment undermined by the renewed fears over the European financial crisis, they said. After Wall Street closed, S&P downgraded the 37 financial institutions, including Citigroup, Bank of America, Goldman Sachs, Morgan Stanley, HSBC, Barclays and UBS. "The downgrades reflect the negative views on the global financial sector and as the European debt crisis persists, the situation is likely to get even worse," Huang said. Among the local financial stocks, China Life Insurance fell 5.35 percent to end at NT$25.65, Fubon Financial shed 3.34 percent to close at NT$30.40, and Cathay Financial ended down 3.17 percent at NT$30.50. Huang said the local bourse is expected to face further volatility, as there is no sign that leaders in the eurozone will iron out a resolution any time soon to take on the financial crisis in the bloc. "If the local market stages a rebound, investors had better sell their holdings for cash to avoid further possible losses down the road," he said. The financial, cement, and paper and pulp sectors suffered the steepest decline among the largest eight sectors on the market, finishing down 2.2 percent. The plastics and chemical, and construction sectors fell 2.1 percent, textiles shed 1.9 percent, foodstuffs lost 1.0 percent , and machinery and electronics closed down 0.6 percent. (By Frances Huang)


Updated : 2021-10-17 22:58 GMT+08:00