After staging a robust rebound a day earlier, the stock market shed 45.3 points, or 0.85 percent, to 5,246.26 at the end of trading yesterday on the back of Wall Street’s fall, analysts said.
Turnover remained light at NT$53.35 billion (US$1.65 billion), with foreign investors buying a net NT$1.18 billion in local shares, compared with a net sale of NT$1.52 billion by domestic investment trust companies, stock exchange data showed.
The local bourse opened at 5,225.05 and fluctuated between 5,246.26 and 5,178.68 during the trading day. Government intervention in the last minutes of trading was believed to have narrowed the fall.
Eric Lai (賴建承), an analyst at Marbo Securities Consultant Co (萬寶證券投顧), said the TAIEX’s performance was closely tied to US equities. The Dow Jones Industrial Average had dipped 76 points, or 0.8 percent, on Tuesday on poor showings by major US high tech companies, Lai said.
Over 200 listed companies, including Taiwan Semiconductor Manufacturing Co (台積電), closed limit down 3.5 percent, stock exchange data showed.
Two of the eight main stock categories gained ground, with the construction sector the best performer, up 3.3 percent, and Lai attributed the rise to a successful auction on Tuesday of the leasing rights to state-owned land in the upscale Xinyi District (信義) of Taipei.
“The transaction helped boost investors’ confidence in the real estate market,” Lai said by telephone. “The planned cut in inheritance and gift taxes was also positive news.”
Looking ahead, Lai said that as long as the US stock market regained stability, the local bourse would witness more rallies, such as on Monday when the TAIEX rallied 271.12 points, or 5.4 percent.
The analyst said he was not worried that the index would suffer a sharp slump after the 3.5 percent daily limit expires at the end of the week.
“The measure is to blame for the thin trading,” Lai said. “While helpful in curbing the size of falls, it also serves to dampen investors’ willingness to enter the equity market.”
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