Taipei shares outlook: Lower on NASDAQ/cross-strait relations concerns

TAIPEI (AFX-ASIA) - Share prices are expected to open lower, with sentiment dampened by NASDAQ's heavy losses, Cisco's job cuts and concerns over cross-strait relations after varying reports the mainland is taking action against the Chi Mei group because of its support for President Chen Shui-bian, dealers said. Reports that Taipei may in turn reconsider its planned relaxation of policy towards China should Beijing order the closure of two mainland plants belonging to the Chi Mei group will unsettle sentiment after tensions had eased somewhat over the past several months, they said. On Friday, the weighted index closed down 30.59 points at 5,680.43 on turnover of 63.04 bln twd. Foreign institutions were net sellers of shares worth 1.78 bln twd, local investment trusts net sellers of 1.39 bln twd and brokers net buyers of 721.30 mln twd. "Wall Street developments have sparked fears that NASDAQ may fall below the 2,000 points level," Daiwa SBCM Cathay Securities Co Ltd assistant general manager Frank Lin said. "Telecommunication-related firms will be hurt by Cisco's moves while semiconductor plays will take their cue from losses in the Philadelphia semiconductor index." Lin said chip stocks will also be hit by concerns of possible inventory dumping by select Japanese IC makers as they close their books at the end of March. Taiwan companies with exposure to China will be negatively affected by the Chi Mei problems, he said.

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