Shares be­low 8,200 points as fi­nan­cials trend lower

The China Post - - TAIWAN BUSINESS -

Shares in Tai­wan close be­low the 8,200 point mark Tues­day as the fi­nan­cial sec­tor led the down­turn of the broader mar­ket amid weak sen­ti­ment to­ward do­mes­tic eco­nomic growth, deal­ers said.

The bell­wether elec­tron­ics sec­tor at­tracted buy­ing on hopes that a weaker Tai­wan dol­lar will boost the com­pet­i­tive­ness of Tai­wanese high- tech prod­ucts in the global mar­ket, which helped the broader mar­ket fend off the ef­fects of the weak fi­nan­cial sec­tor, deal­ers said.

The weighted in­dex on the Tai­wan Stock Ex­change closed down 36.20 points, or 0.44 per­cent, at 8,177.22, af­ter mov­ing be­tween 8,166.77 and 8,277.22. Turnover to­taled NT$ 74.49 bil­lion dur­ing the ses­sion.

The mar­ket opened up 0.43 per­cent and rose to the day’s high on a tech­ni­cal re­bound from a 1.11 per­cent slump in the pre­vi­ous ses­sion, deal­ers said. But as the in­dex moved closer to the near­est tech­ni­cal re­sis­tance at around 8,300 points, in­vestors shifted to the sell side, which pushed the in­dex into the red by the close of the ses­sion, deal­ers said.

“Since the gov­ern­ment cut its forecast last week for Tai­wan’s 2015 eco­nomic growth to less than 2 per­cent, in­vestor sen­ti­ment has be­come very frag­ile,” Marbo Se­cu­ri­ties In­vest­ment Con­sult­ing an­a­lyst Chang Chi­hcheng said.

The Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Sta­tis­tics on Fri­day cut its growth forecast for Tai­wan’s 2015 gross do­mes­tic prod­uct ( GDP) to 1.56 per­cent, from an ear­lier es­ti­mate of 3.28 per­cent, cit­ing slow­ing global de­mand.

“It was not sur­pris­ing that in­vestors rushed to pocket their ear­lier prof­its af­ter to­day’s ini­tials gains. The mar­ket has be­come very weak tech­ni­cally, with selling fo­cused on the fi­nan­cial sec­tor,” Chang said.

He said the thin trad­ing vol­ume on Tues­day in­di­cated that many in­vestors were re­luc­tant to pick up value stocks.

Chang said he sus­pected that for­eign in­sti­tu­tional in­vestors stood on the sell side of the fi­nan­cial sec­tor af­ter they had raised a large chunk of fi­nan­cial hold­ings in re­cent ses­sions. Tues­day’s down­turn is likely to lead to fur­ther volatil­ity among fi­nan­cial stocks, he said.

Ac­cord­ing to the Tai­wan Stock Ex­change, for­eign in­sti­tu­tional in­vestors sold a net NT$ 129 mil- lion worth of shares on the main board Tues­day.

The fi­nan­cial sub- in­dex closed down 2.28 per­cent. Among the fall­ing fi­nan­cial stocks, Cathay Fi­nan­cial Hold­ing Co. ( ) dropped 3.86 per­cent to end at NT$ 44.80, Fubon Fi­nan­cial Hold­ing Co. ( ) lost 3.38 per­cent to close at NT$ 51.40, and CTCB Fi­nan­cial Hold­ing Co. ( ) shed 2.82 per­cent to fin­ish at NT$ 18.95.

“For­tu­nately, buy­ing ro­tated to the ex­port- ori­ented elec­tron­ics sec­tor, which helped pre­vent the broader mar­ket from fall­ing fur­ther as the lo­cal cen­tral bank has en­gi­neered a de­pre­ci­a­tion of the Tai­wan dol­lar against the U. S. dol­lar,” Chang said. “There is grow­ing op­ti­mism that a fall­ing Tai­wan dol­lar will give elec­tron­ics ex­porters a boost dur­ing the up­com­ing Christ­mas hol­i­day sea­son.”

Due to the cen­tral bank’s ef­forts to prop up the U.S. dol­lar, the Tai­wan dol­lar had fallen 2.68 per­cent be­tween Aug. 7 and Aug. 17.

On the back of the Tai­wan dol­lar’s weak­ness, the elec­tron­ics sec­tor out­per­formed the broader mar­ket, ris­ing 0.33 per­cent.

Among the gain­ing high- tech stocks, con­tract chip maker Tai­wan Semi­con­duc­tor Man­u­fac­tur­ing Co. ( ) , the most heav­ily weighted stock on the lo­cal mar­ket, rose 1.61 per­cent to close at NT$ 126.00, and in­te­grated cir­cuit de­signer Me­di­aTek Inc. (

) added 0.75 per­cent to end at NT$ 267.00.

“I think the lo­cal high- tech sec­tor was over­sold in re­cent sell- off. With the year- end shop­ping sea­son ap­proach­ing, the sec­tor may re­main rel­a­tively sta­ble in the near fu­ture,” Chang said.

CNA

A man looks at the quo­ta­tion board at a bro­ker­age in Taipei, yesterday.

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