TAIEX shares down on stop-loss selling and profit-taking

Shares closed 0.43 percent weaker in choppy trade yesterday as investors turned cautious towards the close and locked in profits in the wake of recent sharp gains, dealers said.

They said the market got off to a firmer start after a positive showing on Wall Street overnight but stop-loss selling and profit-taking pressure built up in late trade due to continued uncertainty over stock and credit markets.

The TAIEX closed down 36.52 points at 8,479.08 on turnover of NT$138.83 billion (US$4.22 billion). Decliners outnumbered advancers 1,237 to 457, while 170 stocks were unchanged.

Alex Huang (黃國偉), an assistant vice-president at Mega International Investment Services Co (兆豐國際投顧), said global market uncertainties and local technical resistance continued to cast shadow on the bourse.

"Investors were wondering whether the US Fed's discount rate cut will serve as pain relief or panacea," he said.

Huang noted continuing worries about the fallout of US credit market meltdown, including its impact on the broader economy and consumption.

Steel firms were weighed down by news that China's Baosteel Group Corp (寶鋼集團) plans to cut product prices, with some analysts fearing that local firms may be forced to follow suit. Kaohsiung-based China Steel Corp (中鋼) closed down NT$0.6 at NT$39.50.

Meanwhile, the market is also facing some technical hurdles.

"There are various technical resistances above 8,500 points on the index; investors must have been caught by the dilemma of stop-loss selling and bargain-hunting," Huang said.