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Local market falls as electronics weaken

TAIPEI, Taiwan -- Shares in Taiwan closed lower Wednesday after briefly breaching 9,000 points as the bellwether electronics sector came under pressure from investors pocketing earlier gains, dealers said.

High-tech heavyweights such as smartphone camera lens supplier Largan Precision Co. (大立光電) and Taiwan Semiconductor Manufacturing Co. (TSMC,台積電) reversed earlier gains to trend lower until the end of the session, the dealers said.

The construction sector also faced selling amid fears that the government will increase taxes on houses bought as investments rather than as owner-occupier properties to curb market speculation, they added.

The weighted index on the Taiwan Stock Exchange ended down 17.79 points, or 0.19 percent, at 8,956.92, after moving between 8,947.86 and 9,022.28 on turnover of NT$104.17 billion (US$3.44 billion).

“Judging from today's movement, I think it will be hard for the index to close above 9,000 points any time soon, as technical resistance remains stiff,” Mega International Investment Services Corp. analyst Alex Huang said.

The market opened up 0.39 percent to stand above the 9,000-point mark in the wake of a rebound staged on Wall Street overnight, and momentum accelerated, with buying focusing on electronics stocks, the dealers said.

However, investors rushed to lock in their earlier gains starting in the late morning session, and selling in the electronics sector continued to push the index into the red at the close, they said.

Construction Sub-index Closes Down 0.99 Percent

The construction sub-index closed down 0.99 percent as selling emerged at the market opening upon news that the government will come up with further measures to cap high-flying housing prices in Taipei.

Huaku Development Co. (華固建設) fell 1.95 percent to close at NT$75.50 and Highwealth Construction Corp. (興富發建設) shed 2.75 percent to end at NT$67.10.

Among the high-tech stocks, which suffered late session selling, Largan fell 1.46 percent to close at NT$1,690 off an early high of NT$1,750. The intraday high was the highest level in Largan's history and was based on hopes that the smartphone camera lens supplier will report strong earnings in the first quarter in an investor conference scheduled for the following day.

However, Nanya Technology Corp. (南亞科技) and Inotera Memories Inc. (華亞科技) both closed up 7 percent, the maximum daily increase, at NT$4.78 and NT$31.55, respectively, after the two memory chip-makers reported improved earnings for the first quarter.

TSMC, the most heavily weighted stock in the local market, lost 0.41 percent to end at NT$121.00 off an early high of NT$123.00, while smartphone vendor HTC Corp. shed 0.93 percent to close at NT$159.00 after falling from an intraday high of NT$162.50.

“There are still concerns that Wall Street will face more volatility due to high valuations, and such concerns have prevented many investors from chasing prices,” Huang said. “In particular before Apple Inc. reports its quarterly results later in the day, investors here preferred to remain cautious.”

Touch panel TPK Holding Co. (宸鴻) gained 2.47 percent to end at NT$228.50 after the company turned a profit in the first quarter by cutting costs to improve profitability.

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