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Taiwan shares ends below 9,700 points; Hon Hai bucks downturn

Taiwan shares ends below 9,700 points; Hon Hai bucks downturn

Taipei, March 25 (CNA) Shares in Taiwan closed down Wednesday, with the weighted index falling below the 9,700 point mark as downward pressure focused on large-cap stocks in both the high- tech and old economy sectors, dealers said. Sentiment remained cautious ahead of the upcoming earnings season in the U.S., which could move Wall Street and in turn influence other equity markets around the world, including Taiwan, the dealers said. Bucking the downturn on the broader market, Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, attracted buying, as investors were embracing high hopes that the company will resume talks with Japan's Sharp Corp. to take a stake in the Japanese firm, they added. The weighted index on the Taiwan Stock Exchange ended down 63.83 points, or 0.65 percent, at 9,667.83, after moving between 9,653.47 and 9,743.58 on turnover of NT$94.64 billion (US$3.02 billion). The market opened up 7.59 points and rose to the day's high on a mild technical rebound, but soon dipped into negative territory after the index briefly breached the 9,700 point mark, the dealers said. The weakness continued into the end of the session as many large-cap stocks across the board faced downward pressure, they said. "The selling showed fears that if Wall Street is hit by poor corporate earnings reports, the Taiwan market could suffer. Heavyweights in the local bourse could be targeted by foreign institutional investors," Mega International Investment Services Corp. analyst Alex Huang said. The earnings season in the U.S. will begin next month. "Before possible negative leads surface, investors here are tending to cut their holdings now," Huang said. Among the falling stocks, Taiwan Semiconductor Manufacturing Co. (???) fell 0.33 percent to close at NT$151.00 after its American depositary receipts lost 1.21 percent on Wall Street overnight. Integrated circuit designer MediaTek Inc. (???) lost 0.67 percent to end at NT$443.00 as investors pocketed gains they had built up in recent sessions. Hon Hai, however, rose 1.18 percent to close at NT$94.40 with 46.85 million shares changing hands, on expectations that if the company takes a stake in Sharp, the Japanese brand name is expected to boost the Taiwanese partner's global visibility and broaden its customer portfolio. "I guess that buying in Hon Hai largely came from foreign institutional investors who simply took advantage of a relatively low valuation of the stock," Huang said, adding that foreign buying emerged Tuesday, when they bought a net 10.65 million Hon Hai shares. The market has expected that Hon Hai, which assembles iPhones and iPads for Apple Inc., will report NT$8.5-NT$9 in earnings per share (EPS) for 2014, up from NT$8.16 recorded a year earlier on the back of the launch of the iPhone 6 and iPhone 6 Plus. "Judging from the EPS forecast, the current Hon Hai share price remains low. That's why foreign investors rushed to pick the stock up," Huang said. In the financial sector, Fubon Financial Holding Co. (???) fell 1.39 percent to close at NT$56.70 and rival Cathay Financial Holding Co. (???) lost 0.91 percent to end at NT$49.05. "In addition to worries about corporate earnings in the U.S., concerns over an interest rate hike cycle to be launched by the Federal Reserve remain in place," Huang said. "It is possible that the local bourse will remain weak in the short term." (By Frances Huang)


Updated : 2021-09-17 00:28 GMT+08:00