TAIPEI — Taiwan share prices fell into negative territory yesterday as profit taking emerged, eroding early gains after the index briefly breached the 7,100-point mark, dealers said.
Turnover remained low as many investors took to the sidelines amid political uncertainty ahead of the Jan. 14 presidential election, dealers said.
The weighted index closed down 2.74 points or 0.03 percent at 7,072.08, after moving between 7,054.79 and 7,139.03. Turnover totaled NT$59.33 billion (US$1.96 billion) during the session.
The local bourse has fallen 1,900.42 points, or about 21 percent, this year amid fears over the debt problems in Europe. However, Deputy Premier Sean Chen told reporters that he remained upbeat about the outlook for the local bourse when it opens Monday for the first time in 2012.
On Friday, the market opened up 0.69 percent and moved to the day’s high after Wall Street staged a rally overnight on better than-expected jobless benefit claims and home sales data, dealers said.
However, selling followed, dragging down the index until the end of the session as investors pocketed their earlier gains, dealers said. Market confidence was affected by non-economic factors, they said, referring to the upcoming election.
“It was another quiet session,” E. Sun Investment Consulting analyst Liu Yi-ho said. “Without any expansion in turnover, it was hard for the bourse to make a breakthrough.”
Although many investors were relived to some extent by the latest U.S. economic data, they remained reluctant to chase share prices, even with the market posting gains in early trade, Liu said.
“That’s why the market fell from the day’s high back into the red at the end of the session, while select large cap stocks rose on the back of rotational interest,” Liu said.
Among the market heavyweights, cellphone camera lens supplier Genius Electronic Optical gained 7 percent, the maximum daily increase, to close at NT$207.00 on hopes that it will report sales growth in December. Smartphone maker HTC closed up 0.61 percent at NT$497.00.
“The market has drifted into consolidation mode in recent sessions without a sense of direction,” Liu said. “When foreign institutional investors return to the trading floor next week after the New Year holiday, it is expected to resume meaningful movement.”
The construction sector suffered the heaviest losses among the eight largest sectors, finishing down 1.1 percent due to worries over a cooling property market at home, while machinery and electronics fell 0.2 percent.
However, textiles rose 0.8 percent and foodstuffs gained 0.6 percent, while the paper and pulp, and plastics and chemical sectors closed up 0.3 percent. Cement stocks added 0.2 percent and financials finished 0.1 percent higher.