Wall Street woes, Beijing bubble weigh on market

Shares fell sharply yesterday, with already weak sentiment further undermined by a downturn on Wall Street and concerns about China's economy, dealers said.

A warning from China that it may be forced to adopt aggressive measures to cool its economy coupled with concerns about US interest rates and corporate prospects weighed on the local bourse, which ended down 2.62 percent.

The TAIEX closed down 172.54 points at 6,402.21, on turnover of NT$130.31 billion (US$3.93 billion).

Losers outnumbered winners 803 to 100, with 63 stocks unchanged. Seven stocks closed limit-up, while 66 were limit-down.

"Factors at home and overseas were all negative to the stock market," said Jack Tam, an assistant vice president with Yuanta Core Pacific Capital Management (元大京華投顧).

"The mainland is the island's largest exports destination and any tightening moves there could raise fears of hurting Taipei's exports, particularly raw materials such as steel and cement, among others," Tam said.

However, yesterday's "steep declines may suggest limited immediate downturn, with the benchmark index likely to drift between 6,200-6,600 points in the near term," he added.

Taiwan Semiconductor Manufacturing Co (台積電) closed down NT$1.50 at NT$60.50, in tandem with falls in its American depository receipts (ADRs).

United Microelectronics Corp (聯電) was down NT$1.10 at NT$31.40, also due to softer ADRs and despite announcing strong earnings for the first quarter and positive guidance going forward.

Chunghwa Picture Tubes Ltd (中華映管) was up NT$0.20 at NT$22.50 as robust earnings for the first quarter sparked hopes for an upward revision in its full-year earnings forecast.