Taipei, July 9 (CNA)
Taiwan shares moved lower but recovered part of their earlier losses in the mid-morning session Thursday as investors took cues from a rebound staged by the Shanghai and Shenzhen markets to pick up bargains on the local main board after the latest sell-off, dealers said.
Bargain hunters rushed to buy into large-cap stocks in the electronics and financial sectors after witnessing the weighted index on the main board falling below the 8,800-point mark earlier Thursday morning, the dealers said.
As of 11:09 a.m., the weighted index on the Taiwan Stock Exchange had fallen 0.96 percent to 8,889.84 points off an early low of 8,750.92, on turnover of NT$79.76 billion (US$2.57 billion).
"The local market had been oversold, so some bargain hunters turned active to take advantage of the current relatively low valuation," MasterLink Securities analyst Tom Tang said. "When they spotted the Chinese markets starting to bounce back this morning, it encouraged these bargain hunters."
Before Thursday's rebound, the Shanghai composite index had lost more than 30 percent and the Shenzhen composite index had fallen more than 40 percent since June 12.
The heavy losses prompted Chinese financial authorities to come up with more stimulus measures, including an announcement by China's Securities Finance Corp. to provide funds to big Chinese brokerage firms so they can buy more stocks.
"The latest stimulus measures show China's determination to prevent share prices from falling further, a move that has restored investor confidence and led investors to buy today," Tang said. "The Hong Kong market followed in China's footsteps and also rose. This optimism also spread to Taiwan," he said.
The local electronics sub-index was down 0.99 percent at 346.38, off an early low of 340.34, while the financial sub-index was down 0.78 percent at 1,145.23, off an early low of 1,123.75.
Among the high-tech stocks, Taiwan Semiconductor Manufacturing Co., the most heavily weighted stock in the local market, had lost 0.72 percent to NT$137.00, off an early low of NT$134.00. Hon Hai Precision Industry Co., an iPhone and iPad assembler, had fallen 1.16 percent to NT$93.40, recovering from an early low of NT$91.50 as of 11:09 a.m. In the financial sector, Cathay Financial Holding Co., which posted a 34.79 percent year-on-year increase in net profit for the first half of this year, had gained 0.80 percent to NT$50.40, off an early low of NT$48.20.
In addition to bargaining hunting, "judging from the movement of the financial sector, which is the favorite of the government-led funds, I suspect that the government funds kept buying to boost market sentiment," Tang said.
"Based on the fluctuations seen this morning, the weighted index on the main board has found strong technical support at around 8,800 points," Tang said.
Where the local bourse will go will depend on how the China market will move, Tang said, adding that if China shares continue to rebound, the Taiwan market will follow suit.
"But uncertainty over the debt crisis in Greece remains, so investors had better remain alert over this," Tang said. (By Frances Huang)
Taipei, July 9 (CNA)