Sat, Dec 13, 2008 - Page 11 News List

Taiwanese shares take a hit after Big Three bailout fails

AFP , TAIPEI

Taiwanese shares closed down 3.74 percent yesterday as market sentiment was hammered by the US Senate’s failure to reach a bailout deal for the ailing auto industry, dealers said.

The weighted index fell 174.30 points to 4,481.27 off a low of 4,401.05 and a high of 4,654.75 on turnover of NT$90.22 billion (US$2.71 billion).

Losers led gainers by 1,291 to 247 with 190 stocks unchanged.

The market opened down 1.17 percent on a Wall Street plunge overnight as investors shrugged off an interest rate cut by the central bank on Thursday, dealers said.

In line with steep declines on regional markets, the downside extended in late morning trade after the US Senate failed to pass a plan to rescue the Big Three automakers, they said.

In the past four sessions, the market has risen about 10 percent on a technical rebound.

“Investors used the botched US auto bailout deal as an excuse to pocket the recent gains,” Taiwan International Securities (金鼎證券) analyst Arch Shih (施博元) said, adding that financial and electronic heavyweights encountered stiffer pressure.

Shih said he suspected that institutional investors stood behind the sell-off after rushing to pick up bargains in recent sessions.

Dealers said that Thursday’s larger-than-expected 75 basis point interest rate cut raised fears that the domestic economy was in worse condition than previously anticipated.

“The silver lining is that the daily turnover remained moderate, and that shows many investors are willing to keep their holdings, expecting bargain-hunting will soon emerge,” Shih said.

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