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Weak Q3 GDP data sends Taiwan shares lower

2015/10/30 16:54:45

Taipei, Oct. 30 (CNA) Shares in Taiwan closed lower Friday as investors reacted to Taiwan's weak third-quarter gross domestic product (GDP) data and trimmed their holdings, dealers said.

Selling was seen in large-cap stocks almost across the board amid cautious sentiment toward the economy, but the losses were capped by bargain hunting, thought to come from government-led funds, to prevent the index from falling further, they said.

The weighted index on the Taiwan Stock Exchange ended down 16.77 points, or 0.20 percent, at 8,554.31, after moving between 8,503.69 and 8,586.90, on turnover of NT$86.37 billion (US$2.66 billion).

The market opened up 7.17 points and rose to the day's high on a mild technical rebound, but as the index moved closer to the 8,600-point mark, selling set in and kept the weighted index in negative territory to the end of the session.

The government reported Friday that Taiwan's gross domestic product declined 1.01 percent in the third quarter, the worst quarterly performance since the second quarter of 2009, when GDP fell 1.24 percent from a year earlier amid a global financial crisis.

With the weak GDP data dampening investor confidence, downward pressure increased, especially on market heavyweights, before bargain hunters jumped in to help the market recoup some of its earlier losses at the close, they said.

"At a time when market confidence has been fragile, the weak macroeconomic data seemed to have a more visible impact on local shares during most of the session," Ta Ching Securities analyst Andy Hsu said.

"Although the market opened higher on a technical rebound, investors appeared reluctant to chase prices. They simply seized the data as a cause to cut their holdings and lock in their earlier gains," Hsu said.

The silver lining was that the index recovered part of its earlier downturn by the close, he said.

"Judging from the movement of select financial stocks, I think it's possible that the government-led fund was on the buy side to support the index and strengthen investor confidence," he said.

Cathay Financial Holding Co. (國泰金) gained 0.65 percent to close at NT$46.40, off an early low of NT$45.80, and Fubon Financial Holding Co. (富邦金) rose 0.38 percent to end at NT$52.70, recovering from an early low of NT$52.10.

Select old economy stocks also benefited from possible government-led buying, Hsu said. Eclat Textile Co. (儒鴻) was one of them, rising 1.38 percent to close at NT$479.00, off an early low of NT$440.00, to remain the most expensive stock in the local textile sector.

The bellwether electronics sector ended down 0.17 percent. Taiwan Semiconductor Manufacturing Co. (台積電), the world's largest contract chip maker, closed unchanged at NT$136.50, and Hon Hai Precision Industry Co. (鴻海), an assembler of iPhones and iPads for Apple Inc., lost 0.23 percent to end at NT$86.60.

"It seemed that the market has found some technical support at around 8,500 points in the short term," Hsu said.

"But if there is a technical rebound, the index could see stiff technical resistance ahead of 8,700 points as caution during the current earnings season is still dictating market sentiment."

(By Frances Huang)