Confidence hits new low

Consumer confidence in commodity prices slumped to an historic low this month after gas price hikes triggered concerns over inflation, according to a survey released by National Central University yesterday.

As one of the six sub-indices used in the consumer confidence index (CCI), public confidence in consumer price fluctuations for the coming six months fell by 4.7 percentage points from last month to 40, the lowest level since surveys started in 2001, said the university's Research Center for Taiwan Economic Development.

On April 18, state-run Chinese Petroleum Corp (CPC) announced it would raise wholesale gasoline and diesel oil prices by NT$2 (US$0.06) per liter, with smaller rival Formosa Petrochemical Corp (台塑石化) deciding to follow suit the next day.

Electricity fees, prices of long-haul bus tickets, taxi fares and various other consumer goods are also under pressure to increase.

In contrast, public confidence in the performance of stocks jumped by 28 percent, or 18.6 percentage points, to 84.5, the survey showed.

The TAIEX rose 0.71 percent to a five-year high at 7,038.78 on April 19 on the back of Wall Street's sharp gains overnight and as hopes for an end to US rate hikes outweighed a spike in oil prices.

The survey interviewed 2,688 people between April 18 and 20.

With four sub-indices down and two up, the CCI this month edged up by 1.75 percentage points from last month to 70.78.

The index gauges the public's expectations on stock performance, household finances, durable goods, job opportunities, consumer price fluctuations and the economic outlook over the next six months.

Meanwhile, shares fell yesterday on profit-taking in the technology sector as the recent appreciation of the New Taiwan dollar was seen as hurting export-oriented technology companies, which receive payments in foreign currency.

The TAIEX fell 36.1 points to 7,059.94, on turnover of NT$134.91 billion (US$4.22 billion).

Profit-taking in technology companies dragged the index lower as investors switched into non-technology firms because of the stronger NT dollar, traders said.

But the stock exchange statistics showed that foreign investors were net buyers of shares worth NT$5.56 billion, with the inflows clearly boosting the local currency, they added.

"The Taiwan dollar's rise will definitely hurt the margins of tech firms, as they receive payments in foreign currency," said Capital Securities Corp (群益證券) equity sales trader Diana Wu.

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest contract chipmaker by revenue, fell 1.8 percent to NT$67, while global No. 2 United Microelectronics Corp (聯電) dropped 2.9 percent to NT$21.85.