Print

Mail

wiki links

TAIEX drops for first time in last three trading days

The TAIEX dropped for the first time in three days yesterday. Petrochemical makers such as Formosa Plastics Corp (台塑) declined on concerns that their 8.2 percent rally as a group this month may have outpaced profit growth.

"Investors are avoiding petrochemical makers as their recent gains have deviated from fundamentals," said Jerry Chen (陳乃漢), head of research at First Global Investment Trust Co (元大投信), which manages the equivalent of US$640 million in Taiwanese stocks.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) led gains on optimism an increase in US consumer spending will benefit some of Taiwan's exporters.

The TAEIX shed 4.64, or 0.1 percent, to 5,512.16, after rising as much as 1.4 percent earlier. Index futures expiring in August gained 0.3 percent to 5,555.

More than three stocks rose for every two that fell. Turnover totaled NT$119.3 billion (US$3.47 billion).

Formosa Plastics fell NT$1.50, or 2.8 percent, to NT$51.50. Its shares surged 16 percent in the previous nine days.

Taiwanese petrochemical makers such as Formosa had gained after Nippon Oil Corp shut three refineries this month.

While foreign investors have remained aggressive buyers, domestic institutions and retail investors seemed to be concerned about a near-term correction after the benchmark index breached 5,500 points, traders said.

"It seems that domestic investors, especially retailers, have yet to fully adjust themselves to a sustainable upswing in the second half on the back of a US-led economic recovery," Yuanta Core Pacific Securities Co (元大京華證券) assistant vice president Oliver Fang said.
This story has been viewed 1630 times.