Taiwan shares close down 0.60 percent


CNA

TAIPEI — Taiwan share prices closed down 0.6 percent yesterday amid lingering fears that a rising New Taiwan dollar against the U.S. dollar will erode the bottom line of the export-oriented electronics sector, dealers said.

The weighted index fell 50.86 points to 8,293.90, after moving between 8,273.47 and 8,398.30, on turnover of NT$126.56 billion.

The market opened 0.60 percent higher on a technical rebound from the previous session and moved to the day’s high before selling emerged to drag down mainly electronics stocks on global competitiveness concerns, the dealers said.

Sentiment turned more cautious ahead of a policy-making meeting of the U.S. Federal Reserve Board scheduled to start later in the day, with investors watching closely how the U.S. central bank will further loosen liquidity to boost the economy, they said.

A total of 3,026 stocks closed down and 1,125 were up with 244 remaining unchanged.

The machinery and electronics sector and construction issues suffered the heaviest losses, down 0.8 percent each. Financial firms fell 0.5 percent, plastics and chemicals, along with the paper and pulp sector, lost 0.3 percent, and foodstuffs closed down 0.2 percent.

However, textile shares bucked the downward trend, closing up 2.4 percent, while the cement sector closed unchanged.

“The strength of the New Taiwan dollar was to blame for today’s fall,” Hua Nan Securities analyst Stan Chang said. “Investors fear that once the U.S. Fed continues its quantitative easing policy on a large scale, the greenback will become much weaker against the local currency.”

Chang said the currency issue has further complicated the matter of profitability for the bellwether electronics sector, which is witnessing falling global demand amid slowing economic fundamentals.

Chang said the silver lining is that as the market remains awash in liquidity, so the index might see some support as it moves toward 8,200 points.

In the high-tech sector, PC vendor AsusTek fell 1.40 percent to end at NT$246.50, while flat panel maker Chimei Innolux lost 1.77 percent to finish the day at NT$38.85.