Local market dives, index closes at 9,578.56 amid worries over Dome


CNA

TAIPEI, Taiwan — Shares in Taiwan came under heavy pressure to end below the 9,600-point mark Thursday as selling focused on the financial sector amid worries over an increase in non-performing loans, dealers said.

The concerns were raised after the Taipei City Government ordered contractor Farglory Dome to suspend construction of the Taipei Dome project, a move that could affect the property developer’s ability to repay its loans, the dealers said.

While the bellwether electronics sector appeared resilient after recent consolidation, investors also rushed to lock in their earlier gains posted for old economy stocks throughout the session, they added.

The weighted index on the Taiwan Stock Exchange closed down 106.75 points, or 1.10 percent, at 9,578.56, after moving between 9,536.16 and 9,647.53, on turnover of NT$95.999 billion (US$3.15 billion). Downward Pressure in Financial Sector The market opened down 0.52 percent as selling in large-cap stocks emerged, and downward pressure in the financial sector escalated and spread to other sectors, sending the broader market into a tailspin, the dealers said.

��I was surprised by the magnitude of the selling in the financial sector today,�� Concord Securities analyst Kerry Huang said. ��It is too early to say that bank lending will be seriously affected by the suspension of the Taipei Dome project. I think that the financial sector was oversold.��

The financial sector closed down 1.96 percent overall, with Mega Financial

Holding Co. (���ת�) was down 2.17 percent to close at NT$27.00. Mega International Commercial Bank (���׻�), the flagship banking arm of Mega Financial, served as one of the major lenders to Farglory Dome.

Among the falling financial stocks, Cathay Financial Holding Co. (������) shed 3.26 percent to end at NT$62.30, and Fubon Financial Holding Co. (�I����) lost 3.25 percent to close at NT$53.50. Old Economy Sector In the old economy sector, Formosa Plastics Corp. (�x��) lost 4.57 percent to close at NT$75.10 and textile maker Far Eastern New Century Corp. (���F�s�@��) fell 1.76 percent to end at NT$33.40.

The electronics sector closed down 0.65 percent. Hon Hai Precision Industry Co. (�E��), an iPhone and iPad assembler, fell 0.51 percent to end at NT$97.00, while integrated circuit designer MediaTek Inc. (�p�o��) closed up 0.13 percent at NT$400.00.

��It seems that ample liquidity lent support to high-tech stocks today. Amid hopes that the U.S. Federal Reserve will slow down its pace to hike interest rates, foreign fund inflows are expected to continue and that will be good for large cap electronics,�� Huang said.