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Local market retreats amid EU financial woes

TAIPEI -- Shares in Taiwan pulled back Friday amid renewed concerns over debt problems in Europe after a leading shareholder of Portugal's second-largest lender missed its debt payment, dealers said.

The weighted index on the Taiwan Stock Exchange closed down 69.28 points, or 0.72 percent, at 9,495.84, after moving between 9,478.07 and 9,591.27 on turnover of NT$132.83 billion (US$4.44 billion).

TSMC Shows Resilience

Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電), the most heavily weighted stock in the local market, appeared resilient after the chip-maker reported better-than-expected sales for the second quarter, which lent support to the broader market, the dealers said.

In the old economy sector, Nan Ya Plastics Corp. (南亞塑膠) bucked the downturn of the broader market to prevent the index from falling further after the company reported a robust improvement in earnings for the first half of the year, they added.

The market opened 3.41 points lower and moved in a narrow range in the early part of the session, but selling escalated as the financial woes in Portugal started to impact investor sentiment, pushing down the index below the 9,500-point mark at the close, the dealers said.

“The financial conditions of the bank's parent renewed concerns over the debt problems in Europe as many investors feared that the banking woes there will spin out of control,” Hua Nan Securities analyst Stan Chang said.

Due to the situation in Portugal, the Dow Jones Average Industrial ended down 0.42 percent overnight, while the markets in Germany and France, the top economies in Europe, closed down 1.52 percent and 1.34 percent, respectively.

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