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Sat, Jul 19, 2008 - Page 11 News List

Share prices close down on Wall Street concerns

‘LINGERING FEARS’ Local shares opened higher, but profit-taking set in later on fears of possible US market volatility, hitting flat panel and chip makers in particular

AFP , TAIPEI

Share prices closed down 2.28 percent yesterday on worries over whether Wall Street’s recent gains would be sustained amid rising inflation, dealers said.

The weighted index fell 159.19 points to 6,815.32, on turnover of NT$118.93 billion (US$3.91 billion). Decliners outnumbered gainers by 1,758 to 449 with 331 stocks unchanged.

The market opened higher after overnight gains on Wall Street, but profit-taking set in to erode early upside on fears of possible US market volatility with sentiment hurt by Merrill Lynch’s disappointing second quarter results, dealers said.

Selling focused on flat panel makers and memory chip manufacturers on concerns over their pricing power, they said.

“Once the index went up, investors scrambled to pocket money and run. Such movements reflected weak market confidence,” Capital Securities (群益證券) analyst Chen Yu-yu (陳育娛) said.

“The market is still haunted by lingering fears over a deteriorating US economy and high global energy prices,” he said.

Chen said he suspected selling largely came from foreign institutional investors and mounting margin calls.

“The market needs more time to digest selling pressure as the amount of margin trade remains high,” he said.

Concord Securities (康和證券) analyst Allen Lin said he expects the local bourse will move further downward until strong technical support surfaces at around key 6,500 points. For the week to yesterday, the weighted index closed down 429.44 points or 5.93 percent after a 0.23 percent increase a week earlier.

Average daily turnover stood at NT$105.63 billion, compared with NT$100.05 billion the previous week.

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