Wall Street weakness brings down local shares


CNA

TAIPEI — Taiwan share prices closed lower yesterday, falling below the 7,100-point mark, as investors took cues from a fall on Wall Street at the end of the previous week amid lingering concerns over the debt problems in Europe, dealers said.

In addition, sentiment remained cautious in reflection of domestic political uncertainty ahead of the Jan. 14 presidential election as turnover shrank, with many investors staying on the sidelines, they said.

However, the government’s National Stabilization Fund was said to continue its intervention in a bid to prevent the broader market from suffering more losses, the dealers added.

The weighted index fell 27.47 points or 0.38 percent to 7,093.04, after moving between 7,050.25 and 7,103.09, on turnover of NT$70.39 billion. Meanwhile, the Taiwan Stock Exchange announced that the local bourse will be closed between Jan. 19 and Jan. 29 for the Lunar New Year holiday.

The local market opened down 0.39 percent and moved to the day’s low as euro weakness continued, with investor confidence still haunted by rising borrowing costs in debt-ridden countries such as Italy and Spain, the dealers said.

The worries over the debt situation in Europe overtook an upbeat mood that was caused by better-than-expected job data for December in the U.S., prompting investors to cut holdings, while the National Stabilization Fund bought stocks to lend support, they said.

“Without the presence of the stabilization fund, the index would have fallen further,” Mirae Asset Management analyst Arch Shih said.

Shih said the government fund still focused on select large-cap stocks, in particular PC firms, during the session, but the buying simply stabilized the movement instead of giving the broader market a significant boost.

Among the winning stocks, PC vendor Acer gained 4.10 percent to close at NT$39.35, while rival Asustek rose 1.09 percent to end at NT$232.50.

“It is unlikely that the local market will see any immediate breakthrough to leave behind the current consolidation mode before the unfavorable internal and external factors are removed,” Shih said.

The financial sector encountered the heaviest pressure among the eight major stock categories, finishing down 1.04 percent. Machinery and electronics fell 0.46 percent, cement stocks lost 0.33 percent, construction shares shed 0.29 percent, and the paper and pulp sector closed down 0.26 percent.

Textiles fell 0.25 percent, and plastics and chemicals lost 0.01 percent, while the foodstuff sector bucked the downside to close up 0.21 percent.