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DRAM prices force down share price of chipmakers

Share prices closed 0.18 percent lower yesterday, led by Dynamic Random Access Memory (DRAM) chipmakers on weaker than expected contract prices for the second half of August, dealers said.

They said concerns over the settlement of August futures contracts also affected large-cap stocks and eroded earlier gains from a technical bounce driven by Wall Street's overnight rise.

The weighted index closed down 11.47 points at 6,195.18, off a high of 6,234.31, on turnover of NT$66.85 billion (US$2.08 billion).

Decliners led gainers 556 to 315, with 165 stocks unchanged.

Eight stocks closed limit-up, while 17 were limit-down.

The electronics sector was down 0.42 percent and financials lost 0.24 percent. The steel sector was up 2.29 percent, textiles up 0.79 percent and cement up 0.52 percent.

Grand Cathay Investment Services Corp (大華證券投資顧問) president Tu Jin-lung (杜金龍) said a technical rebound in early trade gave way to futures-related selling pressure and weakness in the shares of companies facing poor industry prospects.

"Companies with weak industry leads or those with sluggish earnings results in the second quarter were among the hardest hit this session," Tu said.

Market consolidation following Monday's rebound, which halted an 11-session market decline, was not a surprising trend for the day, dealers said.

Tu said further consolidation may be seen but the local bourse is anticipated to gather enough momentum for an upswing soon, given that it had already gone through a significant correction.
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