Bourse retreats amid Europe debt concerns
CNATAIPEI -- Shares in Taiwan pulled back yesterday amid renewed concerns over debt problems in the eurozone after Italy's parliamentary elections failed to produce a clear winner, dealers said.
February 27, 2013, 12:13 am TWN
Large-cap electronics and financial heavyweights led the downturn as investors seized the debt worries in the eurozone as a cause to lock in the gains they had previously built, they said.
Select old-economy stocks, which had become laggards in the market, appeared relatively resistant to the general gloom, keeping the local bourse from falling further, they said.
The weighted index closed down 66.78 points, or 0.84 percent, at 7,880.90, after moving between 7,871.23 and 7,927.49, on turnover of NT$69.04 billion.
The market opened down 0.71 percent following a plunge on Wall Street overnight as concerns mounted over the debt situation in the eurozone following Italy's elections, dealers said.
Selling continued throughout the session as downward pressure on the electronics sector rose in the wake of the losses posted by the tech-heavy Nasdaq, while investors rushed to lock in profits in the financial sector, they said.
“The European debt issue has returned to haunt global financial markets,” Mega International Investment Service Corp. analyst Alex Huang said.
Many investors, he said, were afraid that the election results in Italy were pointing toward a hung parliament, which could lead to further political uncertainty in the country.
The election also dealt a clear setback to the austerity program of outgoing Prime Minister Mario Monti.
“The possible political chaos is expected to influence Italy's austerity measures to cut debt, which is expected to complicate the debt crisis in the eurozone,” Huang said.
The electronics sector closed down 1.06 percent, with Taiwan Semiconductor Manufacturing Co., the world's largest contract chip-maker, ending 1.43 percent lower at NT$103.50.
Hon Hai Precision Industry Co., which assembles iPhones and iPads for Apple Inc., finished down 1.33 percent at NT$81.70.
TPK Holding Co., one of Taiwan's leading touch panel suppliers, lost 2.13 percent to close at NT$552.00 after the company issued a cautious sales outlook for the first quarter.
The financial sector closed down 0.97 percent on profit-taking after getting a boost in recent weeks from optimism over the opening of Chinese yuan-denominated operations in Taiwan, dealers said.
Cathay Financial Holding Co. lost 1.84 percent to close at NT$37.35, while Chinatrust Financial Holding Co. shed 1.14 percent to end at NT$17.40.
Bucking the downtrend in the broader market, food maker Uni-President Enterprises Corp. gained 0.37 percent to close at NT$54.90, and Asia Cement Corp. rose 0.27 percent to end at NT$36.80.
“It seemed that the local market had technical support at around 7,850 points. But whether it will hold itself well above that level will depend on how global markets perform,” Huang said.