Taiwan shares recoup early losses on bargain shopping


CNA

TAIPEI — Share prices in Taiwan recouped most of their early heavy losses on the back of bargain hunting in select high-tech stocks late in the trading session as investors took advantage of their low valuations, dealers said.

But despite the late buying, turnover remained moderate as many investors remained on the sidelines, waiting to see how the eurozone debt crisis would play out after Greece said it would hold a referendum on a debt resolution play hammered out by European leaders.

The weighted index closed down 23.56 points, or 0.3 percent, at 7,598.45, after moving between 7,448.24 and 7,599.54, on turnover of NT$95.48 billion.

The market opened down 1.83 percent and quickly moved to the day’s low amid renewed concerns over the debt crisis in Europe as the planned referendum has raised uncertainty over the financial situation in the eurozone, dealers said.

The financial sector led the broader market lower amid fears that a possible default by Greece would deal a big blow to banks’ profitability due to their exposure to the debt, they said.

Bargain hunters emerged in late trading, however, to pick up select large cap stocks, in particular flat panel firms, which had been hard hit by their worse-than-expected third quarter results, they added.

“The local bourse appeared resilient compared with its counterparts in the region, although market sentiment was damped by the Greece referendum lead,” E. Sun Investment Consulting analyst Liu Yi-ho said.

“After early sell-off, some investors tended to hunt bargains among the losing high-tech stocks to lift the index,” Liu said.

The machinery and electronics sector bucked the downward trend of the broader market, closing up 0.4 percent with flat panel maker AU Optronics up 3.65 percent at NT$14.20 and rival Chimei Innolux up 3.95 percent at NT$13.15.

The financial sector, however, suffered the steepest decline of any of the market’s eight major stock categories, finishing down 2.0 percent.

Textiles shed 1.3 percent, cement stocks fell 1.0 percent, plastics and chemical shares lost 0.7 percent, construction shares dropped 0.6 percent, paper and pulp stocks fell 0.4 percent, and food shares closed down 0.2 percent.

Liu said the local bourse seemed to have strong technical support at around 7,400 points for the moment.

“But the market’s movements will pretty much depend on how Europe will resolve its financial difficulties. Investors should keep a close eye on the development,” he said.

Among the financial stocks, Fubon Financial closed down 2.84 percent at NT$34.20 and Cathay Financial ended down 2.26 percent at NT$34.60.