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Local bourse falls into consolidation mode

Local bourse falls into consolidation mode

Taipei, May 24 (CNA) Shares in Taiwan fell into consolidation mode Friday, after a steep drop in the previous session, as market sentiment remained cautious over the possibility of an early phasing out of the United States Federal Reserve's stimulus measures, dealers said. While most stocks remained in the doldrums or moved lower, Taiwan Semiconductor Manufacturing Co. (TSMC) and some other market heavyweights rebounded, lending some support to the broader market, dealers said. The weighted index closed down 28.05 points, or 0.34 percent, at 8,209.78, after moving between 8,172.54 and 8,277.56. Turnover totaled NT$82.96 billion (US$2.77 billion) during the session. The market opened up 0.43 percent and rose to the day's high on a technical rebound from a 1.91 percent dive the previous day, as investors here took cues from Wall Street's late-trade buying spurred by improved economic data, dealers said. But as the index moved closer to the 8,300-point mark, profit taking emerged, sending the broader market lower by the end of the session, they said. "After yesterday's sell-off, the local stock market has become technically weaker," Hua Nan Securities analyst Henry Miao said. "The bourse may remain in consolidation mode for while to further digest the downward pressure." "Concerns over a possible policy shift by the Fed continued to dampen market sentiment in the region," Miao said. Among the losing large-cap old-economy stocks, food maker Uni-President Enterprises Corp. fell 0.99 percent to close at NT$60.20, while Formosa Plastics Corp. shed 1.69 percent to end at NT$70.00. In the financial sector, Mega Financial Holding Co. dropped 0.84 percent to close at NT$23.55, and China Development Financial Holding Co. ended down 1.27 percent at NT$8.56. However, TSMC, the world's largest contract chip maker and the most heavily weighted stock on the market, rose 1.39 percent to close at NT$109.50, and smartphone camera lens supplier Largan Precision Co. gained 2.69 percent to end at NT$955.00. "With the market in consolidation, investors tended to look for stocks like TSMC and Largan, which have healthy fundamentals, in which to park their funds," Miao said. "These stocks helped anchor the broader market and prevented the index from falling further," Miao said China's weaker-than-expected manufacturing activity in May has also made investors at home and abroad wary of the economic situation in the region. "The local bourse is unlikely to rebound significantly any time soon as further volatility in the global equity markets is possible in such an unfavorable economic climate," Miao said. "If Wall Street encounters further correction, the local market may follow suit," he said. "It's too early to say where the local index will find support." (By Frances Huang)


Updated : 2021-07-25 11:53 GMT+08:00