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Taiwan shares end down on lackluster Wall Street

Taiwan shares end down on lackluster Wall Street

Taipei, March 24 (CNA) Shares in Taiwan closed lower Tuesday, with downward pressure focusing on large-cap stocks, as investors here followed the lead of a lackluster Wall Street overnight, dealers said. Cautious sentiment toward China's economy also spurred selling in equity markets in Asia, including Taiwan, after manufacturing activity in the world's second largest economy showed signs of weakening, they said. While high-tech blue chips generally moved lower, MediaTek Inc. (???), one of Taiwan's leading integrated circuit designers, outperformed the sector on hopes its March sales will pick up, lending some support to the broader market, dealers said. Buying also rotated to select old economy stocks, such as Yulon Nissan Motor Co. Ltd. (???), whose 2014 earnings per share were the second highest in the company's history, they said. The weighted index on the Taiwan Stock Exchange closed down 26.43 points, or 0.27 percent, at 9,731.66, after moving between 9,701.33 and 9,768.71, on turnover of NT$95.24 billion (US$3.03 billion). The market opened down 2.45 points but moved to the day's high within minutes on a mild technical rebound before selling set in, keeping the index in negative territory for most of the rest of the session. Investors reacted first to weakness on Wall Street overnight and then to news that China's purchasing managers index (PMI) for March had fallen to an 11-month low, they said. "The local market remained in consolidation mode as Wall Street fell overnight, which prevented investors here from buying," President Securities analyst Vickie Hsieh said. "Even worse, the disappointing economic data in China prevented investors from picking up bargains even when the index turned negative," Hsieh said. Faced with a lack of reasons to buy, investors tended to cut their holdings in market heavyweights, in particular in the bellwether electronics sector, Hsieh said. Taiwan Semiconductor Manufacturing Co. (TSMC, ???), the most heavily weighted stock in the local market, fell 1.30 percent to close at NT$151.50, while Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, lost 0.21 percent to end at NT$93.30. "Without a stronger TSMC, it was unlikely for the broader market to steam ahead," Hsieh said. "Selling in the high-tech sector reflected worries about the sector's slow season effects in the first quarter." Bucking the downturn in the broader market, MediaTek gained 1.71 percent to close at NT$446.00. Hsieh said demand for Mediatek's smartphone chips from China remained strong, "and many investors hoped the company's sales growth will pick up from March." In the old economy sector, Yulon Nissan rose 3.33 percent to close at NT$310.00 after the auto company reported a day earlier EPS of NT$21.75 for 2014. Dealers said that based on past experience, the car maker would issue a cash dividend of more than NT$17 per share, offering a potentially attractive return for investors. Hsieh warned, however, that "investors should stay alert during the ongoing earnings season as the results will move individual stocks, such as Yulon Nissan, even as the broader market moves in a narrow range." (By Frances Huang)


Updated : 2021-04-24 00:35 GMT+08:00