Tue, Dec 14, 2004 - Page 11 News List

TAIEX lower after pan-blue win, led by financial stocks

AP , TAIPEI

Taiwan's main stock index ended lower yesterday as investors took profits in financial stocks, fearing the ruling party's defeat in Saturday's legislative elections would slow restructuring of the banking sector.

Investors took profits in the financial sector, which had risen 5 percent since the end of last month.

But the election result is widely viewed as a long-term positive for the market, because the opposition alliance's narrow legislative majority means it can block the government's constitutional moves to enshrine the nation's independence from China. This should keep relations with China stable next year, allowing business ties to continue growing rapidly.

"Financial shares rallied ahead of Saturday's legislative elections as investors placed their bets on a DPP majority, so the opposite outcome caused investors to take profit," said Alvin Teng, a manager at SinoPac Securities (建華證券).

The TAIEX rose in early trade and hit an intraday high of 5,978. But it pulled back in the late morning, reaching an intraday low of 5,818 before finishing 32.74 points or 0.6 percent lower at 5,878.89. Volume was a fairly active NT$85.35 billion (US$2.6 billion).

However, advancers narrowly outnumbered decliners 353 to 324, while 166 issues ended the day unchanged.

Uncertainty over the pending Cabinet shake up also dampened the market, Teng said.

The financial subindex tumbled 1.9 percent, with First Financial Holding Co (第一金控) down 3 percent at NT$26.30. Mega Financial Holding Co (兆豐金控) shed 2.8 percent, while Taishin Financial Holding Co (台新金控) declined 1.7 percent.

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