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Local bourse reverses early gains on profit taking

Local bourse reverses early gains on profit taking

Taipei, June 28 (CNA) The local bourse reversed its early gains on profit taking and moved to negative territory at the end of the session Thursday as market sentiment remained cautious toward the debt problems in the eurozone, dealers said. Turnover remained low, with many investors still staying on the sidelines, watching closely what the leaders at the European Union will conclude in their upcoming summit to tackle the financial crisis in the region, dealers said. The weighted index closed down 13.40 points, or 0.18 percent, at 7,169.61 after moving between 7,165.34 and 7,236.71. Turnover during the session totaled NT$60.71 billion (US$2.03 billion). The market opened up 0.73 percent and moved to the day's high after investors took cues from the gains posted by Wall Street overnight as Washington reported improving durable goods orders and home sales data, dealers said. However, after the index breached the 7,200 point mark, investors rushed to lock in profits amid uncertainty over the global economy caused by the debt crisis in Europe, dealers said. "Worries over the European financial situation offset the effects of the latest positive economic data in the U.S.," Concord Securities analyst Kerry Huang said. "Few can be sure when the global economy will stage a real comeback as the European debt problems have persisted." Select high tech stocks came under pressure throughout the session amid concerns over global demand for 2012, Huang said. "Even if Microsoft launches its long-awaited Windows 8 operating system later this year, significant benefits from a recovery in demand are unlikely to be seen until 2013," Huang said. Among the losing electronics stocks, personal computer vendor Asustek fell 4.26 percent to close at NT$270.00 as the market anticipated a lower-than-expected sales report for the second quarter of this year. Pegatron dropped 3.68 percent to NT$39.25 after the contract manufacturer forecast a quarterly drop in its notebook computer shipments for the third quarter. Huang said the thin trading volume showed a cautious outlook toward the two-day EU summit, which was scheduled to kick off in Brussels later in the day. "The European debt concerns still dictated the trade in the local bourse so I do not expect the weighted index to get out of the current consolidation mode any time soon," Huang said. At the end of the session, the financial sector suffered the heaviest losses among the eight major sectors of the market, finishing down 0.53 percent. Foodstuffs fell 0.18 percent, and the machinery and electronics, and paper and pulp sectors closed down 0.07 percent. Bucking the uptrend on the broader market, cement stocks rose 0.73 percent, construction shares gained 0.43 percent, textiles added 0.13 percent, and the plastics and chemical sector closed up 0.05 percent. (By Frances Huang)


Updated : 2021-07-25 18:54 GMT+08:00