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Foreign investors cash out but TAIEX closes up 0.66%

Share prices closed 0.66 percent higher yesterday in volatile trade as bargain-hunters stood their ground against foreign investors cashing out amid worries over US home loans and a credit squeeze, dealers said.

Wall Street's overnight rebound supported the market, and the upswing provided a better chance for foreign investors to take profits and exit the market, they said.

The weighted index closed up 58.69 points, or 0.66 percent, at 8,950.57 on turnover of NT$220.05 billion (US$6.69 billion).

Decliners outnumbered advancers 1,151 to 444, with 137 stocks unchanged. A total of 15 stocks closed limit-up, while 39 were limit-down.

President Securities Corp (統一證券) manager Johnny Lee said the market was in a corrective mode following recent strong rallies, but with ample liquidity fueling bargain-hunting interest as triggered by Wall Street's overnight rebound.

"Bargain-hunting defended the local bourse today, with liquidity driving such interest," Lee said.

"The gains in New York apparently served as catalyst for the domestic market to bounce back in early trade but we also saw that Taipei stocks are not immune to worries over home loans in the US," he said.

Investors will be keeping an eye on how the US mortgage problems will impact local and regional markets, he said.

United Microelectronics Corp (聯電) rose NT$0.50 at NT$18.20 after reporting stronger than expected second-quarter earnings and third-quarter guidance. CMC Magnetics Corp (中環) dropped NT$1.10 to NT$17 after Hon Hai Precision Industry Co (鴻海精密) denied the two would join forces.
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