Local bourse retreats as investors pocket gains

The high-tech sector remained lackluster amid lingering concerns over the slow season effects in the first quarter, while old economy stocks, in particular firms that have close business ties with China, came under pressure due to a pullback in the markets in Shanghai and Shenzhen, dealers said.

The weighted index closed down 44.01 points, or 0.54 percent, at 7,994.71, after moving between 7,986.59 and 8,063.23, on turnover of NT$90.32 billion (US$3.04 billion).

The market opened up 0.28 points and rose to the day's high on follow-through buying as investors took cues from a rising Wall Street, which hit another record high overnight, dealers said.

Profit taking, however, followed as selling focused on large-cap financial stocks, which had been boosted by hopes of rising financial exchanges across the Taiwan Strait, dealers said.

Downward pressure in certain traditional industrial shares also contributed to the drop in the index by the end of the session, they said.

“Since share prices rose above 8,000 points (last Friday), the market has been faced with strong technical hurdles,” said Alex Huang, an analyst at Mega International Investment Service Corp.

“In particular, the financial sector encountered the steepest decline among the major sectors in the market today as many investors rushed to lock in profits,” he said.

The financial sub-index closed down 2.17 percent, with Fubon Financial Holding Co. dropping 4.32 percent to end at NT$42.10 and rival Cathay Financial Holding Co. falling 3.34 percent to NT$40.55.

“With Wall Street recording a high overnight for the fifth consecutive session, fears have escalated that the U.S. market will suffer a major correction sometime soon, which has scared off many investors here,” Huang said.

“Rising tensions on the Korean Peninsula have also made many investors wary so they are tending to take their money and run at the moment,” he said.

In the electronics sector, which fell 0.04 percent, smartphone vendor HTC Corp. lost 0.59 percent to close at NT$251.00, while smartphone camera lens supplier Largan Precision Co. shed 2.62 percent to end at NT$742.00.

Hermes Microvision Inc. (漢微科), one of Taiwan's leading semiconductor inspection tool and facilities suppliers, gained 2.04 percent to close at NT$750.00, replacing Largan as the highest priced stock in Taiwan.

Personal computer vendor Acer Inc. rose 1.29 percent to close at NT$27.50 after it reported Monday a 6.7-percent monthly growth in consolidated sales for February to NT$28.10 billion.

In the old economy sector, food maker Uni-President Enterprises Corp. fell 1.67 percent to close at NT$58.90, and retailer Ruentex Industries Ltd. dropped 3.76 percent to NT$71.70.

“I expect that the nearest technical support on the local bourse is around 7,900 points, Huang said. “But if it fails to hold above that level, more selling will emerge.”

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