Bourse consolidates ahead of 8,000 points
CNATAIPEI -- Shares in Taiwan ended lower on Thursday after moving in a narrow range and failing to overcome the nearest technical resistance of 8,000 points, dealers said.
March 15, 2013, 12:50 am TWN
Select old economy stocks, in particular those that have close business ties with China, encountered heavier downward pressure as investors were cautious about the market performance in Shanghai and Shenzhen, dealers said.
The high-tech sector remained lackluster amid lingering worries over the slow season effects in the first quarter of the year, while the financial sector failed to react positively to the government's plan to halve the futures transaction tax, dealers said.
The weighted index closed down 43.75 points, or 0.54 percent, at 7,951.76, after fluctuating between 7,946.29 and 8,002.71, on turnover of NT$75.60 billion (US$2.55 billion).
The market opened up 0.09 percent and moved to the day's high as investors took cues from the continued gains on Wall Street overnight that were driven by improved retail sales for February in the U.S. market, dealers said.
However, profit-taking followed, spreading almost across the board and dragging down the index by the end of the session, they said.
“Look at the reduced turnover. Many investors prefer to stay on the sidelines at the moment amid fears of an immediate pullback as downward pressure has built up ahead of 8,000 points,” Hua Nan Securities analyst Stan Chang said.
Chang said the losses on the European markets, especially in London, caused by weakening industrial production in the region, dampened market confidence in the local bourse, leading many investors to think negatively about the global economy.
“Wall Street is also an issue for local investors,” Chang said. “Although the U.S. market continued its climb to a new high, the pace of the gains has slowed down. This has made many investors wary of a major correction sometime soon.” Select “China concept stocks” fell amid fears that the Beijing government will continue to depress property prices, which could affect share prices on the mainland.
The cement sector ended down 1.74 percent and the plastics sector closed down 1.63 percent, with Taiwan Cement Corp. falling 2.86 percent to close at NT$37.40 and Nan Ya Plastics shedding 2.67 percent to end at NT$54.60.
In the financial sector, Cathay Financial Holding Co. lost 0.73 percent to close at NT$40.65, and Chinatrust Financial Holding Co. fell 0.83 percent to NT$18.00.
Bucking the losing trend on the broader market, United Microelectronics Corp. rose 4.50 percent to close at NT$11.60 after the company said it will buy back up to 200 million shares at a price of between NT$7.8 and NT$16.9 over the next month.
“I expect the consolidation will continue in thin trade over the next few sessions, with the index fluctuating between 7,900 and 8,000 points,” Chang said.