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Taiwan shares fail to maintain early strength

Taiwan shares fail to maintain early strength

Taipei, May 15 (CNA) Shares in Taiwan closed lower Friday, failing to sustain early gains amid worries over further volatility down the road, dealers said. The bellwether electronics sector continued trending lower at the close because of lingering concerns over slow season effects seen in the second quarter, they said. After a 2.66 percent plunge on Thursday, the financial sector only staged a mild technical rebound as investors feared that falling bond prices on the U.S. market will erode financial holding companies' overseas investment returns, dealers said. The weighted index on the Taiwan Stock Exchange closed down 31.35 points, or 0.32 percent, at 9,579.48, after moving between 9,552.86 and 9,644.83, on turnover of NT$83.77 billion (US$2.75 billion).
It was the 10th losing session out of 13 since the market hit a 15-year closing high of 9,973.12 on April 27.
The market opened up 0.28 percent and rose to the day's high after bouncing back from a 1.16 percent fall seen a day earlier, when the Executive Yuan raised proposed capital gains tax rates on real estate sales, dealers said. Once the index breached the 9,600-point mark, however, selling set in, especially in the electronics sector, to push the broader market into negative territory, and the weakness continued to the end of the session, they said. "The thin turnover showed that many investors were reluctant to chase prices even when the market staged a rebound in the early session," Concord Securities analyst Kerry Huang said. "Without trading volume expanding significantly, it was hard for the index to overcome the nearest technical resistance at the 60-day moving average so it fell back and dipped below the 9,600-point level today," Huang said. The electronics sub-index ended down 0.14 percent as its earlier gains were eroded by fears that slow season effects and a stronger Taiwan dollar will hurt the sector's profitability, dealers said. Hon Hai Precision Industry Co. (??), the world's largest contract electronics maker, fell 0.64 percent to close at NT$93.10, and smartphone camera lens provider Largan Precision Co. (???) lost 0.96 percent to end at NT$3,080.00. The two are in the Apple Inc. supply chain. Bucking the broader market's downturn, Quanta Computer Inc. (??), the world's largest contract notebook computer maker, gained 2.81 percent to close at NT$76.90 after the company reported improving operating and gross margins for the first quarter. In the financial sector, which closed up 0.45 percent, Fubon Financial Holding Co. (???) rose 0.95 percent to close at NT$63.70, and Cathay Financial Holding Co. (???) added 1.49 percent to end at NT$54.40. The construction sector fell 1.97 percent on the latest version of the capital gains tax plan approved by the Cabinet, which would tax property sellers at higher rates than previously proposed. Highwealth Construction Corp. (???) fell 4.52 percent to close at NT$74.00, and Shining Building Business Co. (??) shed 5.14 percent to end at NT$15.70. "After the sell-off seen Thursday, the market needs more time to consolidate before making a meaningful comeback. Before any breakthrough, trading is expected to remain quiet in the near term," Huang said. (By Frances Huang)


Updated : 2021-09-22 20:13 GMT+08:00