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Local bourse falls in line with Wall Street; turnover expands

Local bourse falls in line with Wall Street; turnover expands

Taipei, Jan. 9 (CNA) Shares in Taiwan pulled back Thursday in the wake of a retreat on Wall Street overnight as investors locked in gains posted by the bellwether electronics sector, dealers said. However, a move by the government to relax day trading rules further boosted turnover in the local bourse as investors became more and more willing to trade, taking advantage of the new trading method, the dealers said. Brokerage stocks attracted buying throughout the session on hopes that the market's trading volume will stay high due to the new day trading rules, which could boost securities companies' profitability, they added. The weighted index on the Taiwan Stock Exchange closed down 41.33 points, or 0.48 percent at 8,514.68, after moving between 8,506.02 and 8,569.11 on turnover of NT$134.15 billion (US$4.47 billion). The market opened down 0.21 points and selling escalated, with large-cap stocks in the high-tech sector such as Taiwan Semiconductor Manufacturing Co. (TSMC) in focus, pushing the index lower at the end of the session, the dealers said. "After yesterday's gains, the market simply fell on technical factors as investors seized the Wall Street weakness as an excuse to sell," Concord Securities analyst Kerry Huang said. The Dow Jones Industrial Average fell 0.41 percent, as many investors were keeping a close eye on the U.S. December non-farm payroll data, due Friday. "Sentiment here was also cautious as the job data could serve as one of the most important indicators of what the U.S. Federal Reserve will do in its next policymaking meeting scheduled for later in the month," Huang said. In the last Fed meeting that wrapped up Dec. 18, the U.S. central bank announced a scaling-back of its bond-buying program by US$10 billion to US$75 billion per month from January. Among the weakening market heavyweights, TSMC, the most heavily weighted stock in the local market, shed 2.88 percent to close at NT$101.00. But Huang said he still has faith in TSMC shares, as the world's largest contract chip maker will continue to benefit from its lead over peers in production technology. "I think TSMC shares will see strong technical support at around NT$100.00 over the next few sessions," Huang said. Led by TSMC's weakness, the electronics sub-index ended down 0.73 percent Integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (ASE) shed 1.97 percent to close at NT$27.35 on local media reports that one of its clients, MediaTek Inc., shifted some of its orders to ASE's rival, Siliconware Precision Industries Co., after a partial shutdown of an ASE plant in Kaohsiung due to pollution problems. However, Hon Hai Precision Industry Co. rose 1.26 percent to end at NT$80.50 as investors took cues from the launch of a 120-inch ultra HD 4K TV in cooperation with U.S. brand Vizio. Also bucking the downtrend of the broader market, Fubon Financial Holding Co. gained 1.18 percent to close at NT$43.00 after the company reported a record high net profit for 2013. Among the brokerage stocks that were lifted by higher turnover in the bourse, Capital Securities added 3.48 percent to end at NT$11.90 and Ta Chan Securities gained the maximum daily increase of 7 percent to close at NT$23.25. "The relaxed day trading rules did prompt investors to trade. I think turnover will be continue to be hight so that securities companies will become the beneficiaries of such a trend," Huang said. (By Frances Huang)


Updated : 2021-06-20 09:14 GMT+08:00