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Local bourse ends down, led by electronics; financials resilient

Local bourse ends down, led by electronics; financials resilient

Taipei, Feb. 10 (CNA) Shares in Taiwan extended losses Tuesday from a session earlier as the bellwether electronics sector led the downturn amid cautious sentiment toward slow-season effects in the first quarter of this year, dealers said. Selling focused on integrated circuit (IC) designer MediaTek Inc. (???) after the company gave a lower-than-expected sales forecast for the January-March period, while the financial sector appeared resilient, with several major financial holding companies reporting strong earnings for January, the dealers said. Turnover remained low as many investors were reluctant to pick up bargains even though some stocks, such as MediaTek, had fallen sharply ahead of the upcoming Lunar New Year holiday, they added. The last trading session before the holiday will be Feb. 13. The weighted index on the Taiwan Stock Exchange closed down 27.80 points, or 0.29 percent, at 9,393.70, after moving between 9,390.13 and 9,435.07 on turnover of NT$74.80 billion (US$2.37 billion). The market opened down 0.17 percent in the wake of a pullback on Wall Street overnight, and with selling in select high-tech stocks escalating, the index fell below the 9,400 point mark and continued to move below that level until the end of the session, the dealers said. While the electronics sub-index closed down 0.66 percent, the financial sub-index outperformed the broader market, up 0.74 percent, to keep the index from falling further at the close, they said. "The local equity market has trended lower in the past few sessions. After the index fell below the five-day moving average of 9,459 points Monday, the bourse has become technically weaker," President Securities analyst Vickie Hsieh said. "It was no surprise that the downturn continued today, in particular after the Wall Street losses overnight." Hsieh said that the high-tech sector was the culprit of Tuesday's losses. "After a MediaTek investor conference held Monday, many investors have become wary of the slow-season effect in the first quarter. This punished the electronics sector," she said. MediaTek fell 7 percent, the maximum daily decline, to close at NT$454.00, with 8.49 million shares changing hands, after the IC designer said that its consolidated sales for the first quarter could range between NT$45.5 billion and NT$49.9 billion, down 10-18 percent from a quarter earlier. The forecast was lower than general market expectations of a roughly 10 percent sequential fall. Dealers said that if MediaTek shares fall to NT$450, a good buying opportunity is expected to emerge. Selling spread to other high-tech stocks. Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, lost 1.72 percent to close at NT$85.50 and smartphone vendor HTC Corp. (???) dropped 0.68 percent to end at NT$146.50. "Fortunately, the financial sector served as an anchor to stabilize the broader market to some extent as investors hailed the sector's bottom line," Hsieh said. "In addition, the sector remained a laggard compared with its electronics counterpart." Fubon Financial Holding Co. (???) gained 2.92 percent to close at NT$52.80 after it posted a 36 percent year-on-year increase in net profit for January, while Cathay Financial Holding Co. (???) added 1.62 percent to end at NT$47.00 after the firm reported a 62.3 percent rise in January net profit. "Before the upcoming Lunar New Year holiday, it is possible that the local index will keep trending lower, as many investors want to cut their holdings and hold more cash in hand," Hsieh said. (By Frances Huang)


Updated : 2021-09-29 07:39 GMT+08:00