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Taiwan shares fail to maintain early strength

Taiwan shares fail to maintain early strength

Taipei, May 8 (CNA) Shares in Taiwan closed down Friday as the market gave up earlier gains amid concern over volatility down the road after a plunge seen a session earlier, dealers said. While the financial sector bounced back technically from Thursday's sell-offs, the bellwether electronics sector trended lower as investor sentiment remained overshadowed by concerns over the slow- season effects in the second quarter, the dealers said. Turnover shrank as many investors stayed on the sidelines to await the release of the U.S. non-farm payroll data for April, due later in the day, for more clues about the U.S. economic climate and the Federal Reserve's monetary policy, they added. The weighted index on the Taiwan Stock Exchange ended down 12.11 points, or 0.12 percent, at the day's low of 9,692.00, off an early high of 9,760.51, on turnover of NT$84.13 billion (US$2.74 billion). The market opened up 0.31 percent and rose to the day's high on a technical rebound after a 1.16 percent dive a session earlier, but with the index moving closer to the nearest technical resistance of 9,800 points, selling set in and escalated, which eroded all of the earlier gains by the end of the session, the dealers said. "After the heavy losses seen Thursday, the local equity market has become technically fragile," said Ta Ching Securities analyst Andy Hsu. "Since the market failed to sustain its earlier gains and fell below 9,700 points, more selling could follow," he added. Hsu said that market confidence has been hurt since foreign institutional investors raised the number of their short position contracts. "There are fears that foreign institutional investors will cut their holdings in the spot market to lock in the gains they have built in recent sessions," he said. Expectations of foreign institutional selling came as local investors feared that Wall Street will encounter a major pullback after U.S. Federal Reserve Chair Janet Yellen warned that the valuation of the U.S. market has been high, the dealers said. Hsu said that investors continued to pocket their gains built up in the bellwether electronics sector to place pressure on the broader market. The electronics sub-index ended down 0.31 percent. Contract electronics maker Pegatron Corp. (??) closed down 2.07 percent to close at NT$90.00 off an early high of NT$94.80. The stock was initially boosted by its strong first-quarter earnings but dipped into negative territory on profit-taking. Integrated circuit packaging and testing services provider Advanced Semiconductor Engineering Inc. (???) fell 2.04 percent to end at NT$43.15, while flat panel supplier AU Optronics Corp. (??) lost 1.62 percent to close at NT$15.20. Taiwan Semiconductor Manufacturing Co. (TSMC,???), the most heavily weighted stock in the local market, closed unchanged at NT$146.50. "Without a stable TSMC, the index could have fallen further," Hsu said. The financial sector closed up 0.73 percent, rebounding from a 2.27 percent drop a day earlier, with Fubon Financial Holding Co. (???) up 3.11 percent to close at NT$66.40 and Yuanta Financial Holding Co. (???) up 2.35 percent to end at NT$17.45. "I am afraid that after today's rebound, foreign investors will resume selling in financial stocks as they own a large chunk of these stocks," Hsu said. (By Frances Huang)


Updated : 2021-09-29 04:32 GMT+08:00