Stock bargain-buys reduce losses over political uncertainty

Share closed 0.51 percent lower yesterday, after bargain-hunting cut losses triggered earlier by concerns over domestic political uncertainty and the US interest rate outlook, dealers said.

The weighted index closed down 33.87 points at 6,556.33, after trading between 6,454.71 and 6,587.46, on turnover of NT$76.05 billion (US$2.32 billion).

After the market's early losses, "investors hunted for bargains among [companies] with bright earnings prospects," said Alvin Teng (鄧可欣), assistant vice president with SinoPac Securities (建華證券).

Some electronics stocks, in particular, attracted interest with their positive prospects ahead of the Christmas shopping season.

Teng political concerns will be limited if an opposition threat of an indefinite sit-in protest to oust President Chen Shui-bian (陳水扁) passes without any incident.

Otherwise, analysts said the risk of any violent confrontation during the protest may still create political uncertainty that could hang over the market in the short term.

United Microelectronics Corp (聯電) closed off NT$0.15 at NT$18.40, despite news that it acquired NT$30.50 million shares of ProMOS Technologies Inc (茂德科技) at an average price of NT$12.94 each. ProMOS gained NT$0.10 to NT$12.75.

China Development Financial Holding Corp (中華開發金控) fell NT$0.10 to NT$12.45 despite news that Standard Poor's has revised the outlook on the company's long-term counterparty credit ratings to "positive" from "stable."

Chunghwa Telecom Co (中華電信) was flat at NT$54.20.