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Local bourse consolidates ahead of 7,700-point level

TAIPEI -- Shares on the Taiwan Stock Exchange remained in a consolidation mode ahead of the 7,700 point mark as the index drifted without direction on a lack of fresh incentives from overseas, dealers said.

Select stocks, such as integrated circuit designer MediaTek Inc., outperformed the broader market on their individual positive leads, but there was no mainstream sector lead to make a breakthrough in the index, dealers said.

The weighted index closed up 8.31 points, or 0.10 percent, at 7,690.65, after moving between 7,675.48 and 7,721.93, on turnover of NT$71.72 billion (US$2.46 billion).

The market opened up 0.15 percent and moved to the day's high as investors took cues from a gaining Wall Street overnight after the European Central Bank reiterated that it is ready to buy bonds from debt ridden European countries, dealers said.

However, as the index breached 7,700 points, profit taking emerged to compromise the gains by the end of the session, they said.

"It was a quiet session today," Grand Cathay Securities Mars Hsu said. "The ECB's comments were simply a repetition of its stance and nothing new at all to the market so it gave investors here little incentive to chase prices."

While the broader market was in the doldrums, certain individual stocks appeared more active throughout the session, he said.

MediaTek rose 2.04 percent to close at NT$325.00 after it reported a 29-month sales high for September.

Many investors have high hopes that the company will raise its smartphone chip shipment target for 2012 from the current estimate of 95 million units on the back of strong demand from China.

Taiwan Semiconductor Manufacturing Co. gained 0.44 percent to end at NT$91.00 on further foreign institutional buying.

"Market sentiment remained cautious as many investors were waiting for the third quarter results to be released by companies on Wall Street later this month," Hsu said.

"In addition, the earnings report season for local market heavyweights is about to start at the end of this month, making investors even more nervous at the moment," Hsu added.

At the end of the session, the financial sector had scored the highest gains among the eight major sectors of the market, finishing up 0.6 percent. Cathay Financial Holding led the financial sector, moving higher by 1.55 percent to NT$32.80 on the back of its numerous property assets.

Textiles rose 0.4 percent, construction stocks gained 0.2 percent, while the cement, plastics and chemical, and machinery and electronics sectors closed unchanged.

Bucking the gains posted by the broader market, foodstuff fell 0.1 percent, and paper and pulp stocks ended down 0.3 percent.

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