Taiwan sharemarket extends losses
February 23, 2013, 12:01 am TWN
TAIPEI -- Shares in Taiwan extended losses yesterday from a session earlier amid cautious sentiment toward the global economy after Europe and the United States reported downbeat economic data overnight, dealers said.
The high tech sector followed its Wall Street counterpart to trend lower, while the financial sector staged a technical rebound to offset impact from the disappointing data from Europe and the U.S., they said.
"China concept stocks," which have close business ties with China, also lent some support to the broader market on expectations that Beijing will come up with measures to stimulate domestic demand, they added.
The weighted index closed down 9.74 points, or 0.12 percent, at 7,947.72, after fluctuating between 7,913.16 and 7,970.24, on turnover of NT$75.67 billion.
The market opened down 0.12 percent and moved to the day's low as investors took hints from the losses posted by Wall Street and the European markets in the wake of the weakness in economic activity, the dealers said.
However, after the index moved closer to the 7,900-point mark, some bargain hunting emerged to help the market recoup part of its early losses at the end of the session, they said.
"Investors' confidence here has been dampened by the latest economic data from Europe and the U.S., preventing the local bourse from making a comeback from yesterday's decline," Hua Nan Securities analyst Henry Miao said.
The eurozone reported that the Purchasing Managers' Index fell 47.3 percent in February from 48.6 percent recorded in January. The February reading was lower than a market expectation of 49 percent.
In the U.S., the Philadelphia branch of the Federal Reserve reported a surprise decline in its monthly business outlook survey against the previous market estimate of an increase.
"As the tech-heavy NASDAQ index on Wall Street suffered a dive overnight, local large-cap electronics became the selling targets," Miao said. "Many electronics heavyweights traded at a relatively high price to earnings ratios, which prompted investors to lock in profits."
The electronics subindex closed down 0.49 percent, with Taiwan Semiconductor Manufacturing Co., the world's largest contract chip-maker, down 1.40 percent to end at NT$105.50 and flat panel supplier Innolux Corp. down 1.24 percent to close at NT$15.95.
However, metal casing maker Catcher Technology Co. outperformed the broader market to close up 0.73 percent at NT$138.00 on hopes that the company's sales will be boosted by orders from smartphone vendor HTC Corp., which recently launched a new high-end model.
The financial subindex closed up 0.58 percent as investors expected that an increase in financial exchanges across the Taiwan Strait will strengthen the sector's bottom line.
Among the "China concept stocks," Taiwan Cement rose 2.14 percent to close at NT$38.25, and food maker Uni-President Enterprises gained 2.04 percent to end at NT$54.90.
Trading in the local bourse will continue Saturday to make up for the reduced number of working days during the Feb. 9-17 Lunar New Year holiday.