Stocks fell yesterday as the results of the mayoral elections in Taipei and Kaohsiung raised uncertainty over the opposition's prospects in the 2008 presidential election, analysts said.
The TAIEX shed 24.18 points, or 0.32 percent, to 7,612.12 on turnover of NT$102.98 (US$3.17 billion) yesterday. Foreign investors sold shares with a net worth of NT$6 billion.
Since the beginning of this month, international investors poured a net worth of NT$34.06 billion into the local bourse, Taiwan Stock Exchange data showed.
"There was no change in the mayoral seats between the Chinese Nationalist Party [KMT] and Democratic Progressive Party (DPP) and there should be no changes in the government's policy direction," said Alex Huang (黃國偉), an assistant vice president at Mega International Investment Services Co (兆豐國際投顧).
The KMT retained the Taipei mayorship on Saturday, while the DPP, to the surprise of many, held on to Kaohsiung.
The results cast doubt on the KMT's chances of winning the presidential election in 2008 and disappointed some investors who had hoped for a major easing in Taiwan's economic policies toward China.
While any dramatic change in policy toward Beijing was unlikely in the near term, the government would maintain its measured pace in relaxing some rules, Huang said.
Analysts appeared optimistic about the future of the local stock market.
"Everything looks okay now. We are still upbeat about the market," George Hou (
Hou said he expected to see a continuous injection of funds from foreign buyers into Taiwan as they attempt to cash in on cheap valuations, mergers and acquisitions and cash dividends.
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