Shares ended slightly lower yesterday, as suspected government support mostly offset selling caused by interest rate hike concerns and China's harsh response to President Chen Shui-bian's (
The TAIEX finished 22.86 points, or 0.4 percent, lower at 5,942.08 on turnover of NT$85.26 billion (US$2.54 billion).
Decliners outnumbered gainers 484 to 315, while 172 stocks finished unchanged.
Early in the session, China's Taiwan Affairs Office said Chen had shown "no sincerity to improve relations" in his inauguration speech.
"What Beijing said was nothing new, but it was undoubtedly negative," said George Wu (吳裕良) of Primasia Securities Co.
Wu said government funds were suspected of stepping into the market shortly before the Taiwan Affairs Office began a press conference. At one point the benchmark index rose to a high of 6,021.
However, the support wasn't sufficient to outweigh a host of negative factors. Investors were also concerned about a possible interest rate hike in the US and high global oil prices, traders and analysts said.
Memory chip stocks were among the biggest decliners after a newspaper said memory chip prices would likely fall further.
Winbond Electronics Corp (
The flat panel sector was mixed. AU Optronics Corp (友達光電) fell 0.8 percent to NT$66 after the paper reported the price of 30-inch flat panels used in televisions has fallen below US$1,000.
The US dollar was trading at NT$29.7 at 10am today on the Taipei Foreign Exchange, as the New Taiwan dollar gained NT$1.364 from the previous close last week. The NT dollar continued to rise today, after surging 3.07 percent on Friday. After opening at NT$30.91, the NT dollar gained more than NT$1 in just 15 minutes, briefly passing the NT$30 mark. Before the US Department of the Treasury's semi-annual currency report came out, expectations that the NT dollar would keep rising were already building. The NT dollar on Friday closed at NT$31.064, up by NT$0.953 — a 3.07 percent single-day gain. Today,
‘SHORT TERM’: The local currency would likely remain strong in the near term, driven by anticipated US trade pressure, capital inflows and expectations of a US Fed rate cut The US dollar is expected to fall below NT$30 in the near term, as traders anticipate increased pressure from Washington for Taiwan to allow the New Taiwan dollar to appreciate, Cathay United Bank (國泰世華銀行) chief economist Lin Chi-chao (林啟超) said. Following a sharp drop in the greenback against the NT dollar on Friday, Lin told the Central News Agency that the local currency is likely to remain strong in the short term, driven in part by market psychology surrounding anticipated US policy pressure. On Friday, the US dollar fell NT$0.953, or 3.07 percent, closing at NT$31.064 — its lowest level since Jan.
The Financial Supervisory Commission (FSC) yesterday met with some of the nation’s largest insurance companies as a skyrocketing New Taiwan dollar piles pressure on their hundreds of billions of dollars in US bond investments. The commission has asked some life insurance firms, among the biggest Asian holders of US debt, to discuss how the rapidly strengthening NT dollar has impacted their operations, people familiar with the matter said. The meeting took place as the NT dollar jumped as much as 5 percent yesterday, its biggest intraday gain in more than three decades. The local currency surged as exporters rushed to
PRESSURE EXPECTED: The appreciation of the NT dollar reflected expectations that Washington would press Taiwan to boost its currency against the US dollar, dealers said Taiwan’s export-oriented semiconductor and auto part manufacturers are expecting their margins to be affected by large foreign exchange losses as the New Taiwan dollar continued to appreciate sharply against the US dollar yesterday. Among major semiconductor manufacturers, ASE Technology Holding Co (日月光), the world’s largest integrated circuit (IC) packaging and testing services provider, said that whenever the NT dollar rises NT$1 against the greenback, its gross margin is cut by about 1.5 percent. The NT dollar traded as strong as NT$29.59 per US dollar before trimming gains to close NT$0.919, or 2.96 percent, higher at NT$30.145 yesterday in Taipei trading
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