Investors cautious after Taiwan was not upgraded

Taiwan share prices closed 0.82 percent lower yesterday on investor disappointment that the nation was not upgraded to developed country status in the FTSE Global Equity Index Series, dealers said.

Instead, the FTSE Group placed Taiwan on a watchlist for its advanced market index, which means there may be an upgrade after a 12-month review period.

Concerns

Dealers said concerns over the decision to press ahead with setting up a powerful independent committee to investigate the pre-poll shooting of President Chen Shui-bian (陳水扁) may also have dampened sentiment, with the move opposed by the government.

The TAIEX closed 48.70 points down at 5,871.07, on turnover of NT$65.34 billion (US$1.93 billion).

Decliners led gainers 470 to 203, with 156 stocks unchanged.

Electronics, old-economy stocks and financials all lost ground as investors mostly opted to stay on the sidelines as evident in the thin volume, dealers said.

"While Wall Street's steady close overnight encouraged investors to hunt for bargains and push the local index into positive territory early, caution set in due to the light turnover," said First Taisec Securities (一銀證券) manager Stanley Hsu.

Taiwan Semiconductor Manufacturing Co (台積電) lost NT$0.10 to NT$45.40 while rival United Microelectronics Corp (聯電) was down NT$0.40 at NT$21.60 on a report that Mega Financial Holding (兆豐金控) and Industrial Bank of Taiwan (台灣工銀) will dispose of their holdings in the company.

Powerchip Semiconductor Corp (力晶半導體) fell NT$0.30 to NT$25.90 after a report that it is considering acquiring Hitachi Ltd's 8-inch-wafer plant in Singapore for an estimated NT$4.0 billion.