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Local bourse pulls back on profit-taking

TAIPEI -- Shares on the Taiwan Stock Exchange fell back yesterday as investors locked in gains posted in the previous session, dealers said.

Sentiment toward economic fundamentals turned even more cautious after the government cut its forecast of Taiwan's economic growth for 2012 to 1.05 percent, from an earlier estimate of 1.66 percent, they said.

The weighted index closed down 16.54 points, or 0.23 percent, at 7,166.05, after moving between 7,139.17 and 7,222.84, on turnover of NT$71.76 billion.

The market opened up 0.52 percent and moved to the day's high on follow-through buying on the back of gains posted Tuesday by major European markets, dealers said.

When the index briefly breached the nearest level of technical resistance at around 7,200 points, however, profit-taking emerged to send the local bourse into negative territory, they said.

“Amid lingering concerns over the global economy, many investors tended to take advantage of any gains to lock in profits,” Hua Nan Securities analyst Henry Miao said.

Miao said the 1.28-percent gains seen Tuesday were simply a technical rebound, instead of the beginning of a recovery, as the global equity markets remained haunted by economic concerns.

“Many investors appeared reluctant to chase prices to push the index higher,” Miao said. “It seemed that the market has been faced with stiff technical resistance ahead of 7,200 points.”

Among high-tech stocks that lost ground, flat panel maker AU Optronics fell 0.89 percent to close at NT$11.10, and rival Chimei Innolux lost 0.46 percent to end at NT$10.90 after a strong showing seen a day earlier.

Personal computer vendor Acer shed 1.31 percent to close at NT$22.60, and rival Asustek Computer lost 1.42 percent to end at NT$313.00.

But smartphone vendor HTC rose 3.18 percent to close at NT$211.00 as bargain hunters turned active after the stock fell more than 13 percent in the previous two trading sessions.

“I do not expect HTC will make a strong comeback since many investors are wary of the company's shipments in the fourth quarter,” Miao said, referring to HTC's estimate that its fourth quarter sales will fall to NT$60 billion from NT$70.2 billion a quarter earlier.

Miao said investors should pay close attention to the movement of stock prices on Wall Street, which was scheduled to resume trading later Wednesday after being suspended for two days because of Hurricane Sandy.

In trading Wednesday in Taipei, the financial sector suffered the heaviest losses among the eight major sectors of the market, finishing down 0.8 percent. Construction stocks fell 0.7 percent, textile shares lost 0.3 percent, and machinery and electronics stocks closed down 0.1 percent.

Bucking the broader market trend, food shares rose 0.8 percent, cement stocks gained 0.4 percent, and plastics and chemical stocks added 0.2 percent, while the paper and pulp sector closed unchanged.

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