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June 28, 2017

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Local market ends down at 8,893.22 on Street losses

TAIPEI--Shares in Taiwan trended lower Wednesday as investors took cues from losses posted on Wall Street overnight, dealers said.

The weighted index on the Taiwan Stock closed down 19.17 points, or 0.21 percent, at 8,893.22, after moving between 8,856.98 and 8,911.03 on turnover of NT$99.22 billion (US$3.30 billion).

Electronics Sector Resilient

Selling was seen almost across the board, with cement and financial stocks in focus, while large-cap stocks in the bellwether electronics sector, such as Taiwan Semiconductor Manufacturing Co. (TSMC,台積電), appeared resilient, lending support to the broader market, the dealers said.

Ahead of a congressional testimony by U.S. Federal Reserve Chairwoman Janet Yellen scheduled for later in the day, many investors preferred to stay on the sidelines, they added.

The market opened down 0.10 percent in the wake of a falling Wall Street overnight, and selling accelerated to push down the index to the day's low before bargain hunters stepped in, helping the market recoup part of its earlier losses at the close, the dealers said.

"After the index ended above the 8,900-point mark yesterday, the local market faced stiff technical resistance," Mega International Investment Services Corp. analyst Alex Huang said.

"Amid fears over a major pullback, investors simply seized the weakness in the U.S. market as a reason to lock in profits and push down many stocks into negative territory," Huang said. "HTC's downtrend was very typical as investors pocketed their earlier gains."

Smartphone vendor HTC Corp. (宏達電) fell 1.71 percent to close at NT$172.00 even after the company said a day earlier that it could swing to profit in the second quarter to stop a three-quarter losing streak. Huang said the improvement in HTC's bottom line had been widely expected and such hopes had boosted the stock significantly in recent sessions.

Financial Sub-index Down 0.53%

Huang said the financial sector, which closed down 0.53 percent, also resulted from a move by investors to take advantage of the sector's gains seen a session earlier.

Among the losing financial stocks, Cathay Financial Holding Co. (國泰金控) lost 1.24 percent to close at NT$43.80, and Fubon Financial Holding Co. (富邦金控) shed 1.12 percent to end at NT$39.70.

In the cement sector, Taiwan Cement Corp. (TCC, 台灣水泥) fell 1.71 percent to close at NT$46.00 after Chia Hsin Cement Corp. (嘉新水泥) rejected a tender offer in which TCC aimed to acquire all of its Hong Kong-listed unit TCC International Holdings Ltd.'s outstanding shares. China Hsin Cement owns a 15.8-percent stake in TCC International.

"Fortunately, electronics heavyweights like TSMC and integrated circuit maker MediaTek Inc. (聯發科) remained resilient or the broader market would have suffered more losses," Huang said.

TSMC rose 0.42 percent to close at NT$118.50 and MediaTek gained 1.77 percent to end at NT$518.00 amid optimism that the global semiconductor business will stage a strong rebound in the second quarter.

"Investors here were waiting for Yellen's comments in her congressional testimony for a clue about the Fed's next move in its monetary policy. It was no surprise that turnover fell today," Huang said. "The local market remained in consolidation mode."

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