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Local market retreats after Nasdaq losses

TAIPEI--Shares in Taiwan pulled back Wednesday as investors took hints from losses incurred on the tech-heavy Nasdaq index overnight to pocket the gains they had built in local large-cap electronics stocks, dealers said.

The weighted index of the Taiwan Stock Exchange closed down 84.44 points, or 0.88 percent, at 9,484.73, after moving between 9,471.65 and 9,574.13 on turnover of NT$114.87 billion (US$3.83 billion).

Cement Sector Gets Stoned

Bucking the downturn on the broader market, cement stocks posted gains to lend some support to the index on hopes that solid demand from China will strengthen their profitability, they added.

The market opened up 1.16 points and rose to the day's high on follow-through buying from a session earlier before investors started to lock in their recent gains, in particular in electronics heavyweights such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), and Hon Hai Precision Industry Co. (鴻海精密), dragging down the index, dealers said.

Downward pressure escalated in the afternoon session to send the index below the 9,500 point mark at the close, they said.

"After a recent strong showing, it was time for the local equity market to take a pause. The losses suffered by electronics blue chips were just technical in nature as their fundamentals remain sound," Mega International Investment Services Corp. analyst Alex Huang said.

Among the falling high-tech stocks, TSMC, the most heavily weighted stock in the local market, fell 1.88 percent to close at NT$130.50 ahead of an investor conference scheduled for later in the day to release the company's second quarter results.

Hon Hai Down By 3.15%

Hon Hai Precision Industry Co., which assembles iPads and iPhones for Apple Inc., fell 3.15 percent to end at NT$107.50.

"With Apple to launch new iPhones later in the year, Hon Hai could be one of the largest beneficiaries. It is unlikely for the stock to fall below NT$100 any time soon," Huang said.

While the electronics sub-index closed down 1.03 percent, laptop computer stocks generally moved higher as U.S. chip giant Intel Corp. reported better-than-expected results for the second quarter as the global personal computer market showed signs of improving.

Contract notebook computer maker Compal Electronics Inc. (仁寶電腦) gained 5.11 percent to close at NT$28.80 and PC vendor Acer Inc. (宏碁股份) rose 3.63 percent to end at NT$22.85.

The cement sector closed up 0.93 percent to outperform the broader market as investors have expected that solid demand in China will boost Taiwanese firms' operations on the mainland, Huang said.

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