Taiwan stock market falls on tech sales; financial shares gain

Sandra Chuang, The China Post

The stock market yesterday fell 30.54 points to close at 5,039.98 on a daily turnover of NT$32.3 billion.

The index rose 2.83 points at the opening but quickly retreated into negative territory as selling in technology shares pushed the index lower. Nevertheless, increased buying in financial shares helped to soften the fall.

Dealers said that the thin turnover was due to investors’ reluctance to jump into the market amid persisting political concerns regarding the year-end elections, and the gloomy outlook for two chipmaker giants United Microelectronics Corp. (UMC) and Taiwan Semiconductor Manufacturing Co. (TSMC).

However, President Chen Shui-bian’s official request for an extraordinary legislative session sparked investors buying interest in financial share as most believed the legislature will pass six financial bills during an extraordinary session by the end of the month, they said. “Investors chose to shift the focus of their investment from the electronics sectors to financials stocks,” said a dealer.

UMC and TSMC shares experienced a modest downturn due to support from government funds after profit-taking by foreign investors. UMC shed 3.2 percent to NT$48.4, while TSMC fell 1.6 percent to NT$90.5. Other technology shares extended losses, triggered by a further downturn on Nasdaq and the UMC’s earnings warning.

Financial shares won modest gains on hopes that the financial holding company law will be passed.