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Local bourse falls below 7,000 points

Local bourse falls below 7,000 points

Taipei, June 8 (CNA) The local bourse pulled back Friday, closing below the 7,000 point mark amid lingering concerns over debt problems in the eurozone, dealers said. While China's interest rate cuts lent some support to select local stocks with close business ties to China, selling in market heavyweights such as smartphone vendor HTC Corp. and Taiwan Semiconductor Manufacturing Co. (TSMC) kept the index in negative territory throughout the session. The weighted index closed down 80.66 points or 1.13 percent at 6,999.65, after moving between 6,979.82 and 7,063.08, on turnover of NT$50.80 billion (US$1.70 billion). The market opened down 0.58 percent on profit taking from the gains posted over the past few sessions as traders took cues from a lackluster performance on Wall Street overnight, the dealers said. Selling escalated until the end of the session to push the index below 7,000 points after other regional markets, such as Tokyo, Seoul and Hong Kong fell despite rate cuts in China, they said. "The rate reduction cut both ways," E-Sun Securities Investment Consulting analyst Liu Yi-ho said. "The rate cut will boost liquidity, which the market likes to see, but the move shows that China had no choice but to pump funds into its slowing economy." "The world's second-largest economy has been affected by escalating debt problems in the eurozone," Liu said. The People's Bank of China, the country's central bank, cut deposit and lending rates by 0.25 percentage points a day earlier, marking the first rate reduction since 2008. Due to the rate cuts, some "China concept stocks" appeared resilient, with retailer Ruentex Industries ending up 1.79 percent at NT$45.50 and China Motors closing up 1.35 percent at NT$26.20. Liu said investors kept unloading large cap stocks amid fragile sentiment toward the global economic outlook. Among the losing stocks, TSMC fell 2.38 percent to close at NT$77.90, while HTC shed 7 percent, the maximum daily decline, to end at NT$352.00 amid pessimism over the company's earnings outlook. "I suspect the selling largely came from foreign institutional investors amid uncertainty over the global economic fundamentals," Liu said. Liu said the local bourse may test the nearest technical support level of around 6,800 points over the next few sessions. At the end of the session, the plastics and chemicals sector suffered the heaviest losses among the eight major stock categories, finishing down 1.65 percent. Textiles fell 1.46 percent, machinery and electronics shed 1.41 percent, and paper and pulp stocks lost 0.96 percent. Cement shares lost 0.88 percent, foodstuffs fell 0.56 percent, construction stocks lost 0.42 percent, and the financial sector closed down 0.01 percent. (By Frances Huang)


Updated : 2021-10-20 22:39 GMT+08:00