Asian stocks fell for the first week in five as investors weighed the pace of economic recovery against valuations near the highest levels in five years.
Commodities producers led the drop amid concerns that demand for raw materials won’t support share-price gains. China National Offshore Oil Corp (CNOOC, 中國海洋石油), China’s largest offshore oil producer, dropped 11 percent in Hong Kong. Rio Tinto Group, the world’s third-largest mining company, slumped 17 percent in Sydney after selling new shares at a discount.
Powerchip Semiconductor Corp (力晶半導體) led a drop by chip companies, losing 17 percent, after extending the deadline on a convertible bond tender offer. Powerchip sank 17 percent to NT$3.33 on Friday.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s largest maker of custom chips, lost 6.6 percent to NT$52.30. Morris Chang (張忠謀), the company’s chairman and chief executive officer, said on Thursday that revenue is likely to fall this year.
Samsung Electronics Co, the world’s biggest computer-memory maker, retreated 3.8 percent to 562,000 won.
“We’re probably more into a grinding period for the economy rather than a rapid recovery,” said Stephen Halmarick, Sydney-based head of investment markets research at Colonial First State, which holds about US$102 billion. “We’ve avoided the Armageddon scenario, but it doesn’t mean we’re back to the brave new world that we were all in a few years ago.”
The MSCI Asia-Pacific Index fell 3.5 percent this week to 101.48. The decline pared the gauge’s rally from a more than five-year low on March 9 to 44 percent. Japan’s Nikkei 225 Stock Average slumped 3.5 percent to 9,786.26 after closing above the 10,000 level for the first time since October last Friday.
Taiwanese share prices are expected to gain further on a continued technical rebound after heavy losses in the past few weeks, dealers said on Friday.
Bargain hunters are likely to turn active to boost the index as they are trying to rebuild positions following a sell-off, they said.
A stronger China market may lift investor confidence on hopes that the nation will serve as a cushion to the global economic woes, while Wall Street has shown its resilience after recent falls, they added.
Financial stocks are likely to outperform the broader market on expectations that Taiwan and China will sign a memorandum of understanding later this month or early next month for increasing cross-strait banking activities, they said.
The market is expected to challenge the nearest technical resistance of the 6,450-6,500 point range this week, any downside may be cushioned by a support at about 6,100 points, dealers said.
For the week to Friday, the weighted index fell 217.08 points, or 3.37 percent, to 6,231.15 after a 5.96 percent fall a week earlier.
Average daily turnover stood at NT$99.87 billion (US$3.04 billion), compared with NT$133.25 billion a week ago.
“The technical rebound started from Friday and the momentum accelerated until the end of the session. I expect more will follow as more bargain hunters are ready,” Grand Cathay Securities Corp (大華證券) analyst Mars Hsu said.
Hsu said he expects interest will focus on the financial sector.
‘ABUSE OF POWER’: Lee Chun-yi allegedly used a Control Yuan vehicle to transport his dog to a pet grooming salon and take his wife to restaurants, media reports said Control Yuan Secretary-General Lee Chun-yi (李俊俋) resigned on Sunday night, admitting that he had misused a government vehicle, as reported by the media. Control Yuan Vice President Lee Hung-chun (李鴻鈞) yesterday apologized to the public over the issue. The watchdog body would follow up on similar accusations made by the Chinese Nationalist Party (KMT) and would investigate the alleged misuse of government vehicles by three other Control Yuan members: Su Li-chiung (蘇麗瓊), Lin Yu-jung (林郁容) and Wang Jung-chang (王榮璋), Lee Hung-chun said. Lee Chun-yi in a statement apologized for using a Control Yuan vehicle to transport his dog to a
Taiwan yesterday denied Chinese allegations that its military was behind a cyberattack on a technology company in Guangzhou, after city authorities issued warrants for 20 suspects. The Guangzhou Municipal Public Security Bureau earlier yesterday issued warrants for 20 people it identified as members of the Information, Communications and Electronic Force Command (ICEFCOM). The bureau alleged they were behind a May 20 cyberattack targeting the backend system of a self-service facility at the company. “ICEFCOM, under Taiwan’s ruling Democratic Progressive Party, directed the illegal attack,” the warrant says. The bureau placed a bounty of 10,000 yuan (US$1,392) on each of the 20 people named in
INDO-PACIFIC REGION: Royal Navy ships exercise the right of freedom of navigation, including in the Taiwan Strait and South China Sea, the UK’s Tony Radakin told a summit Freedom of navigation in the Indo-Pacific region is as important as it is in the English Channel, British Chief of the Defence Staff Admiral Tony Radakin said at a summit in Singapore on Saturday. The remark came as the British Royal Navy’s flagship aircraft carrier, the HMS Prince of Wales, is on an eight-month deployment to the Indo-Pacific region as head of an international carrier strike group. “Upholding the UN Convention on the Law of the Sea, and with it, the principles of the freedom of navigation, in this part of the world matters to us just as it matters in the
The High Court yesterday found a New Taipei City woman guilty of charges related to helping Beijing secure surrender agreements from military service members. Lee Huei-hsin (李慧馨) was sentenced to six years and eight months in prison for breaching the National Security Act (國家安全法), making illegal compacts with government employees and bribery, the court said. The verdict is final. Lee, the manager of a temple in the city’s Lujhou District (蘆洲), was accused of arranging for eight service members to make surrender pledges to the Chinese People’s Liberation Army in exchange for money, the court said. The pledges, which required them to provide identification
RSS