Sat, Sep 02, 2006 - Page 11 News List

Large cap earnings boost market

AFP , TAIPEI

Share prices closed 0.60 percent higher yesterday as select large-cap stocks attracted interest after robust earnings, dealers said.

They said gains posted by the big firms helped the benchmark index stay in positive territory, offsetting the falls experienced by several smaller companies as investors digested recent result announcements.

The TAIEX was up 39.69 points to 6,651.46 on turnover of NT$73.01 billion (US$2.22 billion).

Decliners outnumbered gainers 581 to 465, with 151 stocks remaining unchanged.

A total of 12 stocks closed limit-up, while 11 were limit-down.

The electronics sector was up 1.06 percent and the financial sector up 0.68 percent.

The construction sector was down 0.87 percent and the petrochemical sector down 0.81 percent.

"Select big technology companies posted upbeat earnings and received a mostly encouraging response from investors," said Kevin Chung (鐘國忠), a deputy manager with Jih Sun Securities Investment Consulting Co (日盛投顧).

"But many small firms suffered from disappointing results," he said.

The light turnover indicates the wait-and-see mood of investors, he said, adding that "profit-taking next week cannot be ruled out following the recent rebound."

Companies' sales last month, prospects for the current quarter and domestic political uncertainties will be among the variables affecting the local bourse next week, Chung said.

Taiwan Semiconductor Manufacturing Co (台積電) gained NT$0.70 to NT$58.80 and United Microelectronics Corp (聯電) added NT$0.10 to NT$18.10.

Powerchip Semiconductor Corp (力晶半導體) rose NT$0.50 to NT$22.25, ProMOS Technologies Inc (茂德) gained NT$0.55 to NT$14.10 and Nanya Technology Corp (南亞科技) added NT$0.40 to NT$23.35 on a continued upswing in dynamic random access memory chip prices.

For the business week ending yesterday, the weighted index closed up 125.24 points or 1.92 percent on a technical rebound after a 2.90 percent fall last week.

Dealers said share prices are expected to encounter selling pressure at the key level of 6,700 points next week as political uncertainty continues to haunt the market.

They said that in light of the sit-in protest beginning on Sept. 9 -- a campaign to oust President Chen Shui-bian (陳水扁) because of allegations of corruption -- investors may prefer to retreat from the trading floor because of the fear that political repercussions will impact the market's performance.

Jacky Tam, an analyst with Yuanta Core Pacific Capital Management (元大京華投顧), said he expects the local bourse to drift without direction at the beginning of next week as Wall Street is scheduled to close Monday for the Labor Day holiday in the US.

"The US economy remains a concern to investors in Taiwan, in particular to foreign investors who have appeared cautious in recent sessions," Tam said.

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