Taipei shares outlook: Lower on Hsichih fire, U.S. rate cut uncertainty

TAIPEI (AFX-ASIA) - Share prices are expected to open lower with sentiment undercut by the weekend fire at the suburban Taipei complex which housed offices including those of Acer, Tunxtex and Wei-Chuan, dealers said. 

	    Concerns on this count are expected to be compounded by NASDAQ's losses on Friday as stronger-than-expected U.S. economic data heightened uncertainty 

about the magnitude of a further rate cut by the Federal Reserve, if any, they said. 

	    On Friday, the weighted index closed up 110.55 points at 5,232.72 on turnover of 67.76 bln twd.

	    Foreign institutions were net buyers of shares worth 2.82 bln twd, local investment trusts net buyers of 134.76 mln twd while brokers net buyers of 

148.26 mln twd.

	    "There is no denying the Hsichih fire is likely to have an impact on the market this morning but this is unlikely to prove universal," a Masterlink 

Securities Investment Advisory analyst said.

	    It is questionable if it will have an impact beyond Acer, Tuntex, Wei-Chuan and other directly affected companies, he said. 

	    "I do not expect the momentum seen from late Friday to dissipate just like that. On apparent government support, we have seen follow-up buying in place."

	    With some still expecting a U.S. rate cut tomorrow, the market is unlikely to lose much ground on continuing expectations that the MSCI will give Taiwan shares a higher weighting in its indices later this month, he added.

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