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Bourse recoups most losses as large-caps recover

TAIPEI -- Shares on the Taiwan Stock Exchange recouped most of their earlier losses to end little changed yesterday as select large-cap stocks, in particular those in the financial sector, staged a rebound, dealers said.

However, notebook computer stocks encountered heavy downward pressure throughout the session after Hewlett-Packard, the world's largest personal computer vendor, gave a disappointing earnings estimate for 2013, they said.

Investor sentiment remained cautious toward the global economy, while concerns over the debt problems in the eurozone, especially the situation in Spain, continued to weigh on the market movement, they added.

The weighted index closed down 2.29 points, or 0.02 percent, at 7,682.34, after moving between 7,621.38 and 7,689.08, on turnover of NT$67.99 billion.

“Judging from the gains posted by select financial firms in late session, I suspect the buying largely came from government-run funds in a bid to shore up investor confidence amid pessimism toward the economic climate,” Hua Nan Securities analyst Stan Chang said.

Bucking the downward trend of the broader market, the financial sector closed up 1 percent on the back of the late trade buying.

“Despite the government buying, turnover remained thin, as investors were cautious about the world's economic fundamentals,” Chang said. “HP's gloomy estimate simply confirmed that the slowing economy has impacted global demand.”

HP Chief Executive Officer Meg Whitman forecast overnight that earnings per share for the year to October will range between US$3.40 and US$3.60, much lower than the market's estimate of US$4.16-US$4.18.

She said a turnaround for the company will not happen any time soon, adding that it will take longer to “right this ship than any of us would like.”

Among the losing notebook computer stocks that fell victim to the HP forecast, Quanta fell 3.99 percent to close at NT$74.50, and Wistron shed 4.62 percent to end at NT$33.05.

“With uncertainty over the global PC market in place, investors had better shun local notebook computer stocks for the moment,” Chang said.

At the end of the session, the paper and pulp sector had suffered the heaviest selling among the eight major market sectors, finishing down 0.8 percent.

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