Taipei shares sharply lower on Wall St falls, foreign investor selling

Taipei shares sharply lower on Wall St falls, foreign investor selling - UPDATE

	Published : Tue, 20 Nov 2007 03:13 By : Agencies Print this Story

TAIPEI (XFN-ASIA) - Share prices were sharply lower in early trade following heavy falls on Wall Street overnight amid renewed worries over the US banking sector and housing markets.

Dealers said the mood on the local bourse is likely to remain bearish on expectations that foreign investors will continue to offload their holdings due to uncertainties over global markets.

The US markets fell after Goldman Sachs downgraded large banks and estimated that Citigroup will have to write down 15 bln usd over the next two quarters due to exposure to risky debt.

At 9.30 am, the weighted index was down 254.15 points or 2.93 pct at 8,426.56, after moving in a range between 8,426.26 and 8,483.61.

Turnover was 28.80 bln twd.

'In the footsteps of Tokyo and Seoul, Taipei readily fell victim to yet another stock market plunge across the Pacific overnight,' said an analyst with a securities investment advisory firm.

Foreign investors are set to emerge as major sellers to meet redemption pressure in their home markets, said the analyst, who wished to remain unnamed.

Global investors will now look to the US Federal Reserve for more rate cuts to help restore confidence and underpin the flagging US economy, he said.

'We think the Fed may be ready for more rate cuts by up to 0.75 percentage point by the end of the year,' he said.

The analyst said another focus will be if holiday shopping in the US can live up to the already lowered expectations.

The market's decline was broad-based, with the cement sector down 5.58 pct, textiles down 4.17 pct, plastics/petrochemical down 4.07 pct, food down 3.51 pct, financial down 3.04 pct, and electronics sector down 2.27 pct.

UMC was down 0.70 twd or 3.41 pct at 19.80, reversing yesterday's limit-up gains, after the company denied that it is being targeted by some private-equity firms for an acquisition.

TSMC was down 0.60 at 59.90, with its ongoing share repurchase providing limited support.

(1 usd = 32.40 twd)

philip.wang@afxasia.com

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Taipei shares sharply lower on Wall St falls, foreign investor selling - UPDATE