Taipei shares outlook: Lower on Wall St/economic concerns

TAIPEI (AFX-ASIA) - Share prices are expected to open lower after further losses on Wall Street Friday, with profit warnings from Compaq and Oracle highlighting concerns about the corporate earnings outlook, dealers said.	    They said there may be some support from institutional investors and hopes that U.S. companies seeking to cut costs in a more difficult environment will increase their outsourcing contracts in Taiwan.	    They said investors are now waiting on the outcome of tomorrow's FOMC meeting.	    On Friday, the weighted index closed up 41.19 points at 5,783.93 on turnover of 146.69 bln twd. 	    Foreign institutions were net buyers of shares worth 1.74 bln twd, local investment trusts net buyers of 1.88 bln twd and brokers were net buyers of 62.95 mln twd.	    "The Compaq and Oracle profit warnings were not the first such lead in the market but they still undermined Wall Street ... showing the extensive pessimism towards the U.S. economy and stocks," Truswell Securities Investment Co assistant vice president Michael Hsu said.	    He said the market will be looking closely at what action the FOMC takes.	    "A rate cut of 50 basis points will suggest that the Fed's view about the economy is not as bad as investors,' while a cut of 75 points would suggest much worse prospects."	    The central bank here may follow the FOMC's lead but reserve requirements are likely to be left intact given that there is already excessive liquidity.	    He said the local bourse managed to firm despite weaker regional markets over the past few sessions as investors here pinned hops on outsourcing contracts and window dressing by institutional investors at the end of the first quarter.	    However, "it is open to question how long the local bourse can hold at current levels should the global economy and major markets lose more ground," Hsu added.

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