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Shares fall over a weak Wall Street, US inflation fears

Shares fell yesterday, following declines on Wall Street overnight and weakness in regional markets triggered by US inflation concerns due to higher oil prices.

The TAIEX fell 39.20 points, or 0.6 percent, to 6,095.81. Decliners outnumbered advancers 588 to 343 with 151 stocks unchanged.

"Stocks on Wall Street fell because of inflation concerns. And when there is inflation, it is bad for the global equity markets," Yuanta Core Pacific Securities (元大京華證券) sales manager Oliver Fang said.

The Dow Jones Industrial Average fell 1.2 percent on Wednesday, while the NASDAQ Composite Index dropped 1.7 percent. US stocks fell on comments by banking officials suggesting inflationary pressures.

In Taiwan, banking and steel stocks led decliners, dealers said.

Shares of Chinatrust Financial Holding (中信金控), whose bank is the nation's largest credit-card issuer, fell 3.5 percent to NT$26.1.

Traders said foreign institutional investors sold Chinatrust Financial, the second most active stock on the main board yesterday, on concerns over the company's deteriorating consumer loans. Bank stocks fell 1.4 percent as a whole.

The steel subindex shed 1.7 percent, on concerns overcapacity in China would weigh on steel prices next year. China Steel (中鋼), the country's largest steelmaker by revenue, dropped 2.1 percent to NT$28.4. The company's stock has fallen for four consecutive sessions.

Traders said the benchmark index will likely drop further today ahead of the long weekend. Financial markets will be closed on Monday for the National Day holiday.
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