U.S. stock losses drag down Taiwan stock market

By Sandra Chuang, The China Post

The stock market yesterday was dragged down by overnight losses in U.S. stocks. The index fell 8.21 points to close at 5,048.86, with a daily turnover of NT$42.1 billion. The market shed 42.14 points when the market opened and continued to drop deeper due to the weak overnight performance of the Nasdaq, following profit warnings by Sun Microsystems and Alcatel. After nearly touching the 5,000 breachmark, the index was able to recover as selected buying by government-related funds reportedly helped the market remain above 5,000 points for the rest of the session. “The daily turnover was still weak today as investors preferred the sidelines with fundamental concerns about the uncertain economic outlook,” said a dealer.

Technology shares generally dropped, mainly on the overnight Nasdaq’s slide and fears that the continued lack of order growth might suggest a prolonged weakness for the industry.

Taiwan Semiconductor Manufacturing Co. Ltd. dropped 0.6 percent to close at NT$89.5 while United Microelectronics Corp. ended flat at NT$52 after the company announced positive expectation of its AGM Wednesday.

Financial shares however, were firmer as the government decided to allow domestic banks to set up representative offices in mainland China. In particular, Ta Chong Bank was one of the best gainers in the sectors today on reports that a famous foreign bank was interested in buying a stake at NT$17 per share.