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Gloomy electronics sector dampens investors' mood

Shares closed 0.21 percent lower yesterday despite Wall Street's overnight rally as the key electronics sector continued weaker on concerns over the industry's outlook, dealers said.

After Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) lackluster guidance on Tuesday, investors were getting ready for more disappointment from United Microelectronic Corp (UMC, 聯電), AU Optronics Corp (友達光電) and Chi Mei Optoelectronics Corp (奇美電子), they said.

The TAIEX closed down 11.91 points at 5,650.97, off a high 5,676.94 and a low of 5,597.80, on turnover of NT$54.18 billion (US$1.61 billion).

Decliners led risers 353 to 288, with 145 stocks unchanged. The electronics sector was down 1.1 percent while financials were up 0.4 percent.

"The market has indeed shown signs of stabilization but it is premature to conclude that a sustainable rebound is now just around the corner," SinoPac Securities Corp (建華證券) manager Alvin Teng (鄧可欣) said.

"There is simply no telling how much more ground bellwether electronics are likely to lose given a far from encouraging outlook for the fourth quarter and well into 2005," he said.

"Old-economy" cyclicals and resource stocks also face an increasingly uncertain future given the prospects for an appreciation of the Chinese yuan and perhaps further measures by Beijing to cool the economy, Teng said.

TSMC closed down 0.7 percent at NT$41.90 and UMC lost 2 percent at NT$19.40. AU Optronics fell 2.7 percent to NT$36.30 and Chi Mei Optoelectronics dropped 3.1 percent to NT$34.60.
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