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Taiwan shares end below 8,400 points

Taiwan shares end below 8,400 points

Shares in Taiwan moved lower to close below the 8,400 point mark Friday as investors cut their holdings due to heavy losses on Wall Street and several major European markets overnight resulting from the disappointing decision made by the European Central Bank (ECB), dealers said.

Selling focused on large-cap stocks in electronics and non-high tech sectors, including financials, led by Taiwan Semiconductor Manufacturing Co. (TSMC), the most heavily weighted stock in the market, they said.

Bucking the downturn on the broader market, smartphone vendor HTC Corp. got a boost from market speculation that the company will unveil a smart watch next year, a move which will diversify its product portfolio, they said.

The weighted index on the Taiwan Stock Exchange closed down 57.46 points, or 0.68 percent, at 8,398.60, after moving between 8,355.75 and 8,423.70, on turnover of NT$80.56 billion (US$2.46 billion). The market opened down 0.38 percent in a knee-jerk reaction to a 1.42 percent fall on the Dow Jones Industrial Average and a 1.67 percent drop on the tech-heavy NASDAQ index overnight after the ECB decision, dealers said.

The ECB decided to cut its key interest rates but disappointed the market by maintaining the size of its quantitative easing (QE), which also sent the equity markets in France and Germany down more than 3 percent each. Previously, the market had expected that the ECB would increase the amount of QE by 10 billion euros (US$10.9 billion) a month.

Downward pressure on the local main board continued with the weighted index falling about 100 points at one point before some bargain hunters turned active to help the market recoup part of its earlier losses by the close, dealers said.

"The local market could not isolate itself from volatility on the global financial markets in the wake of the ECB's decision," KGI Securities analyst Phil Chu said. "Taiwan was not the only market in the region to react badly to the ECB move and the latest losses were no surprise at all."

TSMC, the world's largest contract chip maker, fell 1.40 percent to close at NT$140.50, and integrated circuit designer MediaTek Inc. lost 1.82 percent to end at NT$269.00.

In the old economy sector, Formosa Plastics Corp. fell 1.32 percent to close at NT$74.80, Nan Ya Plastics Corp. lost 1.81 percent to end at NT$59.80, and textile maker Makalot Industrial Co. closed down 4.22 percent at NT$215.50.

Among the falling financial stocks, Fubon Financial Holding Co. lost 1.36 percent to close at NT$50.90, and Cathay Financial Holding Co. shed 1.42 percent to end at NT$45.10.

Against the losses on the broader market, HTC gained 1.10 percent to close at NT$82.40 after tech blogger Evan Blass said that the company will launch a smart watch in February, dealers said, adding that the new product is expected to help the company find an alternative sales source.

"In addition to the impact from the ECB, today's selling came amid lingering concerns over a possible interest hike by the U.S. Federal Reserve. Before the upcoming Fed's meeting, the local equity market is expected to continue in consolidation mode over the next few sessions," Chu said.

The Fed has scheduled a policymaking meeting for Dec. 15-16. (By Esme Jiang and Frances Huang)

Updated : 2021-09-18 04:49 GMT+08:00