After the TAIEX surged above the 6,000-point mark on Wednesday, stocks yesterday fell 0.38 percent as a result of shrinking trading values and foreign purchases of electronics stocks, a market watcher said.
The TAIEX shed 22.94 points to close at 6,026.55 on the Taiwan Stock Exchange. Turnover was NT$72.87 billion (US$2.23 billion), down from NT$103 billion on Thursday, when the benchmark rose to 6,049.49, the highest level in five weeks. Decliners outnumbered advancers 340 to 263, while 174 stocks stayed unchanged. Fifteen stocks were limit-up and 3 stocks dropped limit-down.
Foreign investors bought a net NT$4.89 billion worth of local equities yesterday, significantly less than the NT$11.5 billion on Thursday. The market has seen foreign capital inflow amounting to NT$119.5 billion in the first 19 days of this month, according to figures released by the Taiwan Stock Exchange.
"The minor decline is healthy, because, based on the historical experience, the index has often fluctuated several times while meeting the yearly benchmark [6,043 points this year] before rising further," said Calvin Chen (陳程坤), an associate manager at Yuanta Core Pacific Capital Management (元大京華投顧).
The bourse is expected to continue fluctuating in a small range next week, Chen said.
According to a report by JP Morgan Chase Bank, the market is likely to continue its upward trend in the near future.
"We remain positive on Taiwanese equities and forecast the index to reach 10,000 by the year 2005," Krista Yue (
The bank suggested five stock picks: Cathay Financial Holding Co (
"We are staying long financials and broadening exposure to other beneficiaries of reflation such as retailers that are most sensitive to a rise in discretionary spending," the bank said in the report.
JP Morgan suggested avoiding Compal Electronics Inc (