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Local market extends losses amid jitters over Ukraine, finishes below 8,600 points

TAIPEI--Shares in Taiwan on Tuesday extended a downtrend from the previous session, closing below 8,600 points amid lingering concerns over a crisis in Ukraine, dealers said.

Market sentiment was further dampened by the latest heavy losses in European markets, in particular France and Germany, while a decline on Wall Street overnight also prompted investors here to sell, dealers said.

The weighted index on the Taiwan Stock Exchange ended down 47.44 points, or 0.55 percent, at the day's low of 8,554.54, off an earlier high of 8595.59. Turnover totaled NT$91.05 billion (US$3.0 billion) during the session.

The market opened down 0.21 percent in a kneejerk reaction to volatility in the global equity market, with selling seen across the board, dealers said. Downward pressure in the financial and old economy sectors ran deeper, dragging down the index further by the end of the session, dealers said.

“The losses on the local market showed investors' fears over market uncertainty amid the political tensions in Ukraine,” President Securities analyst Vickie Hsieh said. “If the crisis worsens, the global equity markets could become more volatile.”

“For the moment, investors are keeping more money on hand, cutting their equity holdings in a bid to avoid further losses down the road,” Hsieh said.

Hsieh said the financial sector in particular appeared weaker after the sub-index fell below the 120-day moving average of around 1,000 points, closing down 0.73 percent at 995.63.

Market's Further Decline Is Possible: Analyst

"Judging from the losses posted by financial stocks, I do not think government-run funds made much effort to stem the decline. As the sector has turned technically fragile, further decline is possible," Hsieh said.

Among the falling financial stocks, Cathay Financial Holding Co. (國泰金控) fell 1.47 percent to close at NT$43.55, and Yuanta Financial Holding Co. (元大金控) shed 1.29 percent to end at NT$15.30.

Hsieh said investors also seized the global market volatility as a reason to lock in the gains they had built recently in the old economy sector.

In that sector, Taiwan Cement Corp. (台灣水泥) lost 2.41 percent to close at NT$46.50, and textile maker Far Eastern New Century Corp. (遠東新世紀) fell 1.57 percent to end at NT$31.35.

In addition to the negative overseas factors, Hsieh said, the bellwether electronics sector remained weak due to concerns over its February sales reports during the current reporting period.

"Many high-tech firms are likely to report slower sales data for February, given the reduced number of working days last month due to the Lunar New Year holiday," Hsieh said.

Taiwan Semiconductor Manufacturing Co. (台積電), the most heavily weighted stock in the local market, dropped 0.46 percent to close at NT$107.50, while smartphone vendor HTC Corp. (宏達電) shed 1.10 percent to end at NT$135.00 on a Wall Street report that Apple Inc. is poaching HTC engineers and supply chain managers.

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