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Local market takes a dive after Wall Street plunge, Kaohsiung propene blasts: dealers

TAIPEI -- Shares in Taiwan trended lower Friday as investors were affected by a plunge on Wall Street overnight amid concerns over Argentina's latest debt default and the financial problems of a leading Portuguese bank, dealers said.

The weighted index on the Taiwan Stock Exchange closed down 49.34 points, or 0.52 percent, at 9,266.51, after moving between 9,201.83 and 9,274.64, on turnover of NT$98.73 billion (US$3.29 billion).

Technical Support around 9,200

"After the losses Thursday and Friday, the local market is expected to consolidate for some time over the next few sessions," Concord Securities analyst Kerry Huang said. "But judging by today's movement, I think the local market could find short-term technical support around 9,200 points."

The market opened down 0.99 percent and selling accelerated following a 1.88 percent decline in the Dow Jones Industrial Average overnight, dealers said.

Initially focused on the high-tech sector, selling spread to old economy and financial stocks to further drag down the broader market, but as the index approached 9,200 points, some bargain hunting emerged to help the market recoup some of its losses at the close, they said.

"Seeing the dive on Wall Street overnight, it was no surprise that investors here rushed to unload their holdings soon after the local market opened," Kerry Huang said.

"While the impact of the financial woes in Argentina and Portugal are expected to be limited on global financial markets, many investors at home and abroad tended to seize on the lead to cut their holdings and protect whatever gains they had built recently," Huang said.

Fubon Losts Ground

In the financial sector, Fubon Financial Holding Co. (富邦金控) lost 2.32 percent to close at NT$46.40, and Cathay Financial Holding Co. (國泰金控) fell 1.98 percent to end at NT$49.40 as investors locked in the gains they had previously accumulated, dealers said.

In the old economy sector, LCY Chemical Corp. (李長榮化學) fell 7 percent, the maximum daily decline, to close at NT$23.25 and China Petrochemical Development Co. (中石化) also shed 7 percent to end at NT$11.40 amid fears that they could be implicated in the blasts, dealers said.

The two companies, said to have pipelines in the areas where explosions occurred, have denied having anything to do with the blasts.

Among the falling electronics giants, TSMC, the most heavily weighted stock in the local market, fell 0.83 percent to close at NT$120.00, while Hon Hai, which assembles iPads and iPhones for Apple Inc., lost 1.45 percent to close at NT$102.00.

Bucking the downturn in the electronics sector, integrated circuit designer MediaTek Inc. rose 5.86 percent to close at NT$496.50 after the company raised its forecast for smartphone chip shipments in 2014 to 350 million units from 300 million.

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