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Taiwan shares end up as buying rotates to non-high tech stocks

Taiwan shares end up as buying rotates to non-high tech stocks

Taipei, Feb. 26 (CNA) Shares in Taiwan closed higher Friday as buying rotated to non-high tech stocks, in particular in the petrochemical and financial sectors, helping the broader market recoup earlier losses, dealers said. Buying in non-high tech stocks appeared visible in the late trading session, while momentum in the bellwether electronics sector seen a session earlier faded to some extent amid lingering concerns over a deal between Hon Hai Precision Industry Co. and Sharp Corp. after the Taiwanese firm put the acquisition on hold, they said.

The weighted index on the Taiwan Stock Exchange closed up 45.30 points, or 0.54 percent, at 8,411.16, after moving between 8,347.80 and 8,432.74, on turnover of NT$81.61 billion (US$2.46 billion).

The market opened up 0.16 percent and rose to the day's high in the wake of a higher Wall Street, where the Dow Jones Industrial Average closed up 1.29 percent and the S&P 500 index ended up 1.13 percent overnight, dealers said. But, with the local index breaching 8,400 points, selling emerged, especially of Hon Hai and its subsidiaries, to push down the broader market before some bargain hunters turned active to pick up select old economy and financial stocks and vault the index back the 8,400 level by the close, they said.

"It was no surprise that the local main board encountered some technical resistance after the index hit 8,400 points," Concord Securities analyst Kerry Huang said. "Fortunately, the market remained awash in liquidity, which prompted the index to recover, while today's gains were limited."

Huang said that rotational buying remained active in the local equity market as many investors still have large chunks of cash on hand. "So, the electronics sector took a pause today, but non-high tech stocks took the spotlight. To me, the market remained technically healthy."

The electronics sector closed up only 0.19 percent Friday after rising 1.31 percent a session earlier. The reduced momentum in the high tech sector resulted from a retreat by Hon Hai and its flat panel subsidiaries after the manufacturing giant said a day earlier that the bailout plan for Sharp is not a done deal yet, although the financially troubled Japanese firm has opted for Hon Hai's proposal.

Hon Hai, which said it needs time to clarify a document received from Sharp and put the bailout plan on hold, fell 0.64 percent to close at NT$78.00. Media reports said that the document showed Sharp has been burdened by 350 billion Japanese yen (US$3.12 billion) in contingent liabilities.

Among Hon Hai's subsidiaries, flat panel maker Innolux Corp. lost 2.42 percent to close at NT$9.66, and touch panel supplier General Interface Solution (GIS) Holding Ltd. shed 1.32 percent to end at NT$112.00.

"The local equity market appeared relatively cheap, encouraging many investors to pick up bargains today, shifting their focus to the old economy and financial sectors to offset the impact resulting from falling shares of Hon Hai and its subsidiaries," Huang said.

In the petrochemical economy sector, which closed up 1.59 percent on stable international crude oil prices, Formosa Plastics Corp. rose 1.02 percent to end at NT$79.00, and Nan Ya Plastics Corp. gained 2.90 percent to close at NT$63.80.

Among the gaining financial stocks, E. Sun Financial Holding Co. rose 1.78 percent to close at NT$17.20, and Cathay Financial Holding Co. added 1.08 percent to end at NT$37.30. (By Frances Huang)