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Local bourse weakest in Asia as investors stay on sidelines

Shares on the Taiwan Stock Exchange closed up 0.01 percent yesterday, the weakest in Asia, as many investors stayed on the sidelines, keeping turnover low amid lingering economic concerns, dealers said.

Interest in the high-tech sector was hampered by fears that a rising New Taiwan dollar will hurt the country's global competitiveness, while select “China concept stocks” — from companies that have close business ties with China — appeared resilient on hopes of further stimulus measures by Beijing, they said.

The weighted index closed up 1.01 points, or 0.01 percent, at 7,465.41, after moving between 7,448.06 and 7,495.45, on turnover of NT$52.79 billion.

The market opened up 0.13 percent and moved to the day's high as investors reacted positively to an overnight rise on Wall Street after Washington reported a better-than-expected housing report, the dealers said.

However, investors' willingness to chase prices was low, so that the market failed to overcome strong technical resistance ahead of the 7,500-point mark to end flat at the end of the session, they said.

“Without turnover expanding significantly, it was unlikely the market would get out of the doldrums at a time when many investors remained very concerned about the economic fundamentals at home and abroad,” Concord Securities analyst Kerry Huang said.

Huang said the debt crisis in the eurozone continued to be one of the factors keeping many investors on the sidelines before a two-day summit of the European Union, set to kick off later in the day.

“Many investors are watching closely whether debt-ridden Spain will seek a bailout to deal with its massive loans,” Huang said. “Before word from Spain on a bailout, many investors preferred to retreat from the trading floor.”

Huang said the electronics sector remained weak throughout the trading session due to the Taiwan dollar's appreciation.

Among the losing high-tech heavyweights, smart phone vendor HTC Corp. fell 1.16 percent to NT$255.50, and personal computer supplier Asustek Computer Inc. shed 1.99 percent to end at NT$295.50.

However, Taiwan Semiconductor Manufacturing Co., the world's largest contract chip-maker, rose 0.8 percent to close at NT$88.10, lending some support to the broader market and preventing the index from falling into the red.

Huang said China concept stocks attracted some buying as investors embraced hopes that China will come up with further stimulus measures to boost its economy.

“In particular, after China reported that its economy grew 7.4 percent for the third quarter, below a government target of 7.5 percent, many investors are expecting Beijing to pump more funds into the market soon,” Huang said.

Stocks traded on the Shanghai Stock Exchange closed at 2,131.69 yesterday, up 26.07 points or 1.24 percent. Stocks traded on the Shenzhen Stock Exchange closed at 8,798.2, up 157.02 points or 1.82 percent.

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