Share prices closed 0.66 percent lower yesterday amid fears of waning foreign interest after a recent buying spree ahead of Morgan Stanley Capital International Inc's (MSCI) reweighting in local shares, dealers said.
The TAIEX closed down 39.94 points at 5,971.62, on turnover of NT$79.25 billion (US$2.53 billion), compared with NT$74.11 billion on Tuesday.
Risers led decliners 472 to 379, with 159 stocks unchanged.
A total of 38 stocks closed limit-up and 16 limit-down.
MSCI's changes came into effect after the market closed on Tuesday.
Tourism and transportation stocks outperformed on expectations that they will benefit from an influx of sightseers from China, while construction shares gained ground on the legislature's approval of extraordinary infrastructure spending of NT$90.40 billion for this year.
"Concern that foreign investors might become more cautious about buying shares or even turn net sellers certainly explained the market weakness, particularly among bellwether electronics," said Daniel Tseng (曾建詮), a manager at Fubon Securities Investment Services Co (
But it remains to be seen whether that will actually happen, he said.
All in all, Tseng said he does not expect a decisive sell-off by foreign investors so long as Wall Street keeps up a largely positive tone in the near term.
As such, domestic investors are likely to start buying aggressively again soon enough once the uncertainty over the stance of foreign investors is out of the way, he added.
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