Taipei shares lower early trade as margin call fears discourage bargain-hunting

Share prices were lower in early trade as bargain-hunting was offset by fears of margin calls following yesterday's more than 300-point plunge in the weighted index.

While some local stocks managed a technical rebound, lingering worries over US economic health and a worsening domestic political atmosphere continued to plague the market.

At 9.56 am, the weighted index was down 10.29 points or 0.13 pct at 8,177.66, off a low of 8,095.13 and a high of 8,202.94.

Turnover was 39.73 bln twd.

"Concerns over the fallout from the US credit crisis remain and sentiment is being further dampened by the worrisome political uncertainties ahead of parliamentary elections next month," said an analyst with a local securities house.

"Those who conducted margin trading previously are now eager to reduce their portfolios amid fears of margin calls."

Recent quick falls may pave the way for a technical rebound in the broad market, but the bellwether technology sector's prospects may be hurt by deteriorating fundamentals.

"The technology sector is being clouded by the slow season and uncertainties over demand from the US," the analyst said.

Investors are also concerned about rising costs in the tech firms' increasingly important China operations.

"The focus is on the potential for profit margins to suffer as new Chinese regulations boost labor costs and tax burdens," the analyst said.

Decliners outnumbered advancers 1,085 to 683, with 490 stocks unchanged.

No stocks were limit-up, while 32 stocks were limit-down.

The electronics sector was down 0.46 pct and financials slipped 0.16 pct.

The food sector was up 2.49 pct and cement rose 2.12 pct.

Among stocks in focus, Taiwan Semiconductor Manufacturing Co shed 1.10 twd to 59.60; Hon Hai Precision Industry Co was unchanged at 181.50; MediaTek rose 6.00 twd to 391.00; Taiwan Cement gained 1.60 twd or 3.72 pct to 44.60 and Uni-President Enterprises rallied 1.60 twd or 4.52 pct to 37.00.

(1 usd = 32.40 twd)