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Portfolio adjustments erode TAIEX's daily gain

Shares closed little changed yesterday as end of month portfolio adjustments eroded gains made after Wall Street's strong overnight rebound, dealers said.

The last-minute sales were likely triggered by foreign investors trimming holdings of heavyweights to make room for new additions to the MSCI Standard Index Series. The annual changes by the index company took effect after the market closed.

The TAIEX slipped 2.39 points to the day's low of 8,144.95 on turnover of NT$136.31 billion (US$4.13 billion).

Advancers led decliners 862 to 270, with 207 stocks unchanged.

Dealers said the bourse also gained support from the government's eagerness in shoring up the stock market, after the central bank and the Financial Supervisory Commission on Wednesday urged local investment trust and securities firms to sell more equity funds that invest in domestic shares.

Last year, the nation's institutional investors only had 10.5 percent of their portfolios invested in the domestic stock market, far lower than the 31 percent seen in US, UK, German, French and Japanese institutional investor portfolios in 2003, the central bank said.

Dealers said steadier Chinese markets also helped calm nerves after heavy losses on Wednesday following an increase in taxes on share transactions, Beijing's latest effort to dampen exuberant investors chasing prices too high.
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