Wednesday November 28, 3:13 PM
Taiwan stocks end lower but little downside seen
sg.biz.yahoo.com
TAIPEI, Nov 28 (Reuters) - Taiwan stocks closed sharply lower on Wednesday as concerns over the upcoming elections triggered a strong wave of selling across the board, but analysts said expectations of state buying would put a floor on the downside.
The benchmark TAIEX <.TWII> index ended down 132.75 points or 2.90 percent at 4,447.58, extending a 0.61 percent fall on Tuesday.
"Cautious investors started to retreat from the market so we can see that selling was heavy in late trade," said Albert Lin, vice president at Hotung Securities.
However, government-linked funds were likely to be actively supporting the market to shore up investor confidence ahead of December 1 elections, as they have during past polls, Lin said.
He estimated the TAIEX would consolidate between 4,200-4,500 points for the rest of the week.
December 1 elections for legislators, mayors and county magistrates are expected to redraw the island's political landscape with the dominant Nationalist Party expected to lose its parliamentary majority.
Reflecting cautious sentiment, turnover fell to T$98.34 billion from T$125.03 billion in the previous session.
The market opened firmer due to gains in Taiwan Semiconductor Manufacturing (TSMC) <2330.TW> and United Microelectronics Corp
(UMC) <2303.TW>, two semiconductor heavyweights, but it fell into negative territory at midday.
The main index hit a three-month high on Monday. Including Wednesday's fall, the TAIEX has risen 29 percent since a nearly nine-year low reached in early October.
All sectors lost ground in the session.
The heavily weighted electronics sub-index <.TELI> shed 2.57 percent and the banking and insurance sub-index <.TFNI> tumbled 3.42 percent.
Memory chip maker Winbond Electronics <2344.TW>, the market's third most active stock, dropped T$1.00 or the daily seven percent downward limit to T$13.70 and rival Mosel Vitelic
<2342.TW> also finished limit-down, falling T$0.65 to T$8.80.
Analysts attributed the losses partly to profit-taking after recent gains inspired by a rise in chip prices. Winbond and Mosel have risen 48 percent and 68 percent, respectively, since early October.
Acer Inc <2306.TW>, Taiwan's top personal computer maker, was off T$0.75 or 5.3 percent to T$13.35 despite seeing less pressures on its brand-name operations this year.
Among other active shares, First Commercial Bank <2802.TW>, the island's largest listed commercial bank in terms of assets, slipped T$0.80 or 4.3 percent to T$17.60 and China Development Industrial Bank <2804.TW>, Taiwan's top investment bank, fell T$1.00 or 5.1 percent to T$18.80.
"Weak fundamentals in the banking sector has always been a concern," said Justin Lin, analyst at MasterLink Investment Advisory.
Taiwan's overdue loan ratio for all banks hit a record high of 7.79 percent in end-September from 6.47 percent in June.
On the technical charts, Taiwan's 14-day relative strength index was at 53.984, below overbought territory.
The over-the-counter TAISDAQ <.TWOII> index finished down 1.36 point, or 1.32 percent, at 101.37. Taiwan's December index futures <0#TX:> fell 145 points to close at 4,390. |
