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Shares close lower on overnight Wall Street declines

Shares closed 0.69 percent lower yesterday in reduced turnover as investors took note of declines on Wall Street overnight after the release of US data showing strong house sales last month dampened hopes of an interest-rate cut, dealers said.

They said technical concerns outweighed gains in the local currency, with investors continuing their cautious approach.

The TAIEX closed down 56.44 points at 8,159.97 on turnover of NT$95.18 billion (US$2.86 billion).

Decliners outnumbered advancers 705 to 396, with 229 stocks unchanged.

For the week to Friday, the weighted index closed up 125.83 points or 1.57 percent after closing little changed the previous week.

Average daily turnover stood at NT$106.42 billion, up from NT$77.37 billion.

JPMorgan Chase & Co raised its forecast for Taiwan's stocks, citing "reduced downside risk" following first quarter earnings reports.

The TAIEX index could rise to 8,600 by the end of this year, JPMorgan analysts Bernard Liu, Raymond Hung and Arian Mowat wrote in a report on Thursday.

JPMorgan had earlier forecast that the TAIEX would reach 8,000 this year.

"Following the first quarter results, consensus estimates for 2007 seem to have stabilized, which eases our concerns over further downside risk to earnings," JPMorgan analysts said in the report.

Companies listed in the index will post a 22 percent earnings increase next year and their average valuation against estimated future earnings is 13.1, below a historical median of 14, the analysts said.
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