Sat, Dec 06, 2008 - Page 11 News List

Shares down 0.70 percent amid high-tech weakness

CAUTIOUS SENTIMENTWall Street again spooked the local bourse, with US jobs data a main culprit. Taiwan’s electronics sector suffered selling to the session’s end


Taiwanese shares closed down 0.70 percent yesterday on continued weakness in the bellwether electronics sector amid weakening global consumption, dealers said.

The weighted index fell 29.89 points at 4,225.07, off a low of 4,190.02 and a high of 4,261.32, on turnover of NT$40.05 billion (US$1.2 billion).

Losers led gainers by 911 to 410 with 288 stocks unchanged.

The market opened lower as investors took cues from an overnight plunge on Wall Street after the latest disappointing US jobs data, dealers said.

The Dow Jones Industrial Average had closed down 2.51 percent overnight, the tech-heavy NASDAQ composite slid 3.14 percent and the broad-market Standard & Poor’s 500 sank 2.92 percent.

In Taipei trading, selling in electronics continued until the end of the trading session on fears that the deteriorating global economy would further undermine the sector’s profitability, dealers said.

Market sentiment toward high-tech stocks had turned more cautious after several electronic heavyweights lowered their earnings outlook for the fourth quarter, they added.

“The electronic sector has served as the backbone of Taiwan’s exports. Pessimism seems to have run deeper after the earnings downgrade,” President Securities (統一證券) analyst Steven Huang said.

Huang said he suspected the government stepped in to pick up large cap stocks like Taiwan Semiconductor Manufacturing Co (台積電) to support the broader market.

“The government’s support has prevented the market from heavy losses but is unlikely to reverse the current downturn,” Huang said, referring to the lingering impact from the global economic meltdown.

Elsewhere in Asia, stock markets closed the week mixed. Tokyo dipped 0.08 percent, Hong Kong jumped 2.5 percent, Shanghai rose 0.86 percent, Seoul advanced 2.1 percent, Sydney lost 1.2 percent and Mumbai shed 2.87 percent.

“Investors in Hong Kong are less panicky than they were months ago,” said Castor Pang (彭偉新), a strategist at Sun Hung Kai Financial Securities (新鴻基證券).

“They are focusing on the improving sentiment in the mainland’s stock markets, instead of the bearishness on Wall Street,” Pang told Dow Jones Newswires.

Ahead of yesterday’s US jobs report, London was down 1.34 percent, Frankfurt lost 2.57 percent and Paris dropped 2.86 percent in late morning trading in Europe.

Several European central banks slashed their interest rates on Thursday as authorities struggle to thwart the accelerating global downturn, but the cuts, which would normally support stock market sentiment, appear to have had little lasting effect.

The European Central Bank slashed rates to 2.5 percent while the Bank of England cut rates by 100 basis points to 2.0 percent — the lowest level since 1951.

A worse-than-expected reading for non-farm payrolls would increase the odds of the Federal Reserve slashing US interest rates by at least 50 basis points from the current level of 1.0 percent when it meets next week, dealers said.

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