Taiwanese shares closed up yesterday, but a late selloff pared back a bigger early advance spurred by the US bailout of insurance giant AIG, dealers said.
While somewhat disappointed by the Fed’s decision to leave interest rates unchanged, markets were buoyed by an overnight 1.3 percent rise on Wall Street, they said.
The TAIEX rose 44.28 points, or 0.77 percent, to 5,800.87, on turnover of NT$102.66 billion (US$3.21 billion).
The market opened high on news that the US Federal Reserve said it was extending a US$85 billion loan to salvage troubled AIG, hoping to stem financial chaos after the collapse of investment titan Lehman Brothers.
But early gains were lost as investor uncertainty kicked in again, said Michael Hsu (�?@) of Taiwan Life Asset Management (台壽保投信).
“Investors are still not sure about their prospects, not sure what may happen following a run of financial turmoil,” Hsu said.
Asian stocks turned in a mixed performance yesterday, while European shares were higher in early trade.
Japan’s Nikkei 225 average added 1.2 percent to 11,749.79 after sinking nearly 5 percent the day before to its lowest finish in more than three years.
South Korea’s KOSPI climbed 2.7 percent, but Hong Kong’s blue-chip Hang Seng Index dropped 3.6 percent to 17,637.19, dragged by Chinese banks to its worst close since Oct. 26. The Shanghai benchmark fell 2.9 percent, while Australia’s S&P/ASX 200 shed 0.6 percent.
The US Federal Reserve helped allay some fears about the financial system with a US$85 billion emergency loan to shore up insurance giant American International Group Inc. But there were lingering fears across the region of more trouble ahead should bank stocks sink further and credit losses continue to pile up.
“AIG helped stabilize the market, but there could be more turmoil. You don’t know who’s next to go,” said Francis Lun (藺常念), general manager of Fulbright Securities Ltd (富昌證券) in Hong Kong.
In Japan, the financial issues, which had been battered on Tuesday, started higher but lost steam. Mizuho Financial Group Inc fell 0.7 percent. Mitsubishi UFJ Financial Group, the world’s largest bank by assets, rose 1.01 percent.
Banks elsewhere in the region fared worse. Cathay Financial Holding Co (國泰金控), Taiwan’s largest financial service provider, lost 4.5 percent in Taipei trading, while Macquarie Group Ltd, Australia’s biggest securities firm and investment bank, nose-dived 7.8 percent.
In Hong Kong, China Merchants Bank (招商銀行) plunged more than 7.7 percent after revealing its was carrying US$70 million in Lehman debt.
Leading lender Industrial and Commercial Bank of China (中國工商銀行) dropped 9.9 percent.
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