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Local market ends below 8,900 points as investors take profits

TAIPEI--Shares in Taiwan closed lower Thursday to push down the index below 8,900 points as investors locked in gains they had built up in recent sessions, dealers said.

Selling focused on large-cap and high-priced electronics stocks, while select flat panel shares, such as AU Optronics Corp. (AUO, 友達光電) and Innolux Crop. (群創光電), outperformed the broader market and posted gains, amid optimism toward demand from China, the dealers said.

The financial sector got a boost from bargain hunting in the latter part of the trading session, preventing the index from falling further at the close, they added.

The weighted index on the Taiwan Stock Exchange closed down 16.91 points, or 0.18 percent at 8,888.54, after moving between 8,871.16 and 8,913.74, on turnover of NT$97.52 billion (US$3.22 billion).

The market opened down 2.51 points as investors shrugged off an overnight rise on Wall Street and selling increased, in particular in large-cap high-tech stocks such as Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) and smartphone camera lens supplier Largan Precision Co. (大立光電), the dealers said.

Turnover fell, as many investors chose to stay on the sidelines ahead of the upcoming Tomb Sweeping Festival, in order to avoid possible negative leads from overseas at a time when the local market is closed but foreign markets are open, they said.

Technical Resistance Turns Strong

"Since the local market breached 8,900 points yesterday, technical resistance has turned stronger. It was no surprise that investors tended to take profits they had gathered in the past few sessions," Ta Ching Securities analyst Andy Hsu said.

In the past three trading sessions, the weighted index on the main board gained 1.49 percent.

Hsu said the bellwether electronics sector fell victim to the downward pressure, with the electronics sub-index closing down 0.59 percent.

TSMC, the most heavily weighted stock in the local market, fell 1.25 percent to close at NT$118.50 and integrated circuit designer MediaTek Inc. (聯發科) shed 1.93 percent to end at NT$458.00, while Largan lost 0.98 percent to end at NT$1,510.00. "I am not worried about the pullback of these stocks today as they have sound fundamentals," Hsu said. "The losses were simply technical in nature."

However, flat panel maker AUO gained 5.36 percent to close at NT$11.80 and rival Innolux added 2.83 percent to end at NT$10.90 as investors have high hopes that shipments to China will increase on rising demand over the mainland's May 1 Labor Day holiday.

"It is possible that the momentum of AUO and Innolux will continue as foreign institutional investors remain on the buy side due to improving sentiment toward the flat panel market outlook," Hsu said.

The financial sector appeared resilient, ending up 0.08 percent, as late session buying was sparked by the sector's relatively low valuation, the dealers said.

Chang Hwa Commercial Bank (彰化銀行) rose 0.84 percent to close at NT$18.00 and Cathay Financial Holding Co. (國泰金控) ended up 0.45 percent at NT$44.20.

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