Taiwan stocks close flat

24 Oct, 2006

Taiwan stocks ended flat on Monday, with microchip heavyweight TSMC leading technology shares lower ahead of the busiest week for the release of third-quarter results. After trading in negative territory through most of the session, the main TAIEX share index ticked up 0.01 percent to finish at 7,040.26.
The heavily weighted electronics sub-index was down 0.41 percent while construction stocks rose. "We should hear positive results from heavyweight tech firms this week, but those have been factored in their stock gains," said Victor Liu, an assistant vice president for Prudential Financial, which oversees T$90 billion (US $2.7 billion) in client assets. Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chip maker, sank 0.97 percent ahead of its third-quarter results announcement on Thursday. But the stock had jumped nearly 8 percent in the last two months.
"No substantial gains for the main index are likely in the near term, due to the heavy technical pressure near the 7,000 point level," Liu said. He said Prudential Financial's mutual funds are switching gradually to "China plays" from tech shares.
Although tech shares weakened, the construction sub-index jumped 3.34 percent. Kindom Construction surged the daily 7 percent limit. Shares worth T$71 billion (US $2.1 billion) changed hands, pulling back from a recent high of T$112.2 billion last Monday.
Tech shares traded lower. Chi Mei Optoelectronics, the world's number-four flat panel maker, dropped 3.44 percent. Chi Mei is slated to report quarterly profits at its quarterly investor conference on Thursday. But Acer Inc, the world's number-four PC vendor, rose 0.88 percent despite fears over shortages of parts for computers.
Chinatrust Financial Holding, Taiwan's top credit card issuer, ended 0.4 percent lower on concerns the current probe into Chinatrust would further delay consolidation of the financial industry. Investigators said on the weekend they would ask Chinatrust's vice chairman, Jeffrey Koo Jr., to return to Taiwan this week from overseas, local media reported.

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