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Market dips on Street dive but stays above 8,900

TAIPEI -- Shares in Taiwan came under pressure Friday, closing lower as investors took hints from a drop on Wall Street overnight, but the index managed to hold above 8,900 points, dealers said.

While many electronics stocks were hit by a steep decline on the tech-heavy NASDAQ index overnight, select heavyweights, including contract chip-maker Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) and smartphone camera lens supplier Largan Precision Co., emerged from an earlier low to lend support to the broader market, dealers said.

The weighted index on the Taiwan Stock Exchange ended down 40.05 points, or 0.44 percent, at 8,908.05, after moving between 8,848.24 and 8,909.97. Turnover totaled NT$96.52 billion (US$3.22 billion) during the session.

The market opened down 0.54 percent and fell to the day's low, in the wake of heavy losses in the U.S. market, with selling focusing on the bellwether electronics sector, dealers said.

After the index fell below 8,900 points, bargain hunters became active, picking up TSMC and Largan shares, which helped the broader market recoup part of its earlier losses by the close, dealers said.

"Judging from the gains posted by TSMC and Largan, it seems investors remained willing to buy into companies that have sound fundamentals," Concord Securities analyst Kerry Huang said.

"Without the gains posted by these heavyweights, the index would have fallen further today," Huang said.

TSMC, the world's largest contract chip-maker, rose 0.42 percent to close at NT$120.00, off an early low of NT$118.00 after it reported Thursday that its first quarter consolidated sales had beat its forecast.

Largan Precision Gains 0.62 Percent

Largan (大立光) gained 0.62 percent to end at NT$1,635.00, recovering from an early low of NT$1,600.00 amid optimism toward its bottom line after it reported a 77 percent month-on-month increase in consolidated sales for March.

"Despite this resilience, investors have to watch out for a possible pullback as Largan shares have been moving closer to the nearest technical hurdle at around NT$1,700.00," Huang said.

In reflection of a 3.1 percent drop on the NASDAQ index, the local electronics sector closed down 0.49 percent. Integrated circuit designer MediaTek Inc. (聯發科) fell 0.96 percent to close at NT$465.00 and Hon Hai Precision Industry Co. (鴻海精密), the world's largest contract electronics maker, shed 0.81 percent to end at NT$86.10.

"It seems that local investors did not panic like their counterparts in the U.S.," Huang said. "As the local market remains awash in liquidity, I do not think the local market will suffer a steep drop any time soon. The local index could see strong technical support at around 8,800 points even if the market encounters further volatility."

In the old economy sector, food product supplier Uni-President Enterprises Corp. (統一企業) lost 1.16 percent to close at NT$51.00, and textile maker Far Eastern New Century Corp. (遠東新世紀) ended down 0.78 percent at NT$31.95.

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