Chinese rhetoric dampens investors' buying enthusiasm

Shares 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 (陳水扁) inauguration address last week, an analyst said.

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 gainers 484 to 315, while 172 stocks finished unchanged.

Early 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 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 stocks were among the biggest decliners after a newspaper said memory chip prices would likely fall further.

Winbond Electronics Corp (華邦電子) closed 1.2 percent lower at NT$15.9 and ProMOS Technologies Inc (茂德科技) dropped 1.7 percent to NT$17.7.

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.