Taipei shares close weaker, tracking Wall St after Bernanke comments

Taipei shares close weaker, tracking Wall St after Bernanke comments - UPDATE

	Published : Thu, 19 Jul 2007 07:48 By : Agencies Print this Story

TAIPEI (XFN-ASIA) - Share prices closed weaker, tracking an overnight pullback on Wall Street after Federal Reserve Chairman Ben Bernanke struck a cautious tone on the US economy and housing sector.

Bernanke said the US housing sector might get worse before it gets better and that it remains a risk to consumer spending and overall economic growth.

Dealers said downside on the local bourse was limited, however, by the still strong expectations that there will be another liquidity-driven rally ahead of the island's parliamentary and presidential elections early next year.

The weighted index closed down 12.04 points or 0.13 pct at 9,473.31, off a high of 9,529.35 and a low of 9,441.79, on turnover of 232.29 bln twd.

'Shares continued to consolidate their gains... (which previously) pushed the benchmark index to above 9,500 points,' said Oliver Fang, a Yuanta Core Pacific Securities assistant vice president.

'We have not seen a decisive pullback either, for most people would not be put off by a healthy hiatus ahead of a resumed rally towards 10,000 points,' he said.

Fang said fresh impetus should be derived from local companies' upcoming second-quarter earnings and guidance for the second half.

'Shares should regain momentum when companies start talking about a brighter second half, even though it may be seasonally driven,' he added.

Decliners led risers 750 to 702, with 159 stocks unchanged.

A total of 58 stocks closed limit-up and 32 were limit-down.

The paper sector was down 3.27 pct, financials lost 1.34 pct, construction fell 1.27 pct, cement dipped 1.0 pct, food slid 0.9 pct, plastic/petrochemicals retreated 0.29 pct and textiles lost 0.07 pct.

Thanks to bargain-hunting after recent weakness, the electronic sector was up 0.47 pct.

The Taiwan dollar closed the morning at 32.821/dollar, unchanged from the previous close.

UMC closed up 0.10 twd at 19.95 while TSMC was down 1.00 at 70.00.

ProMOS was unchanged at 13.30, little affected by a source disclosing that it sustained a loss of 2-3 bln twd in the second quarter to June.

Powerchip was up 0.10 at 21.20 after booking a capital gain of 224.10 mln twd from another sale of Macronix shares. Macronix was limit-up 1.10 at 17.50, gaining on expectations of its benefiting from its close ties with client Nintendo.

Hon Hai was down 1.00 at 276.50 after once again ruling out a merger with Quanta Computer, which was down 0.20 at 55.00.

Taiwan Cooperative Bank was down 1.05 at 26.40, with profit-taking eroding yesterday's upswing driven by rumors of a merger with Cathay Financial.

Cathay Financial was up 1.30 at 91.90.

Fubon Financial fell 0.10 to 32.60. The company rejected reports about a plan to sign a stake purchase contract with Xiamen City Commercial Bank tomorrow.

(1 usd = 32.80 twd)

philip.wang@afxasia.com

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Taipei shares close weaker, tracking Wall St after Bernanke comments - UPDATE