Taiwan's key stock index had its biggest decline in three weeks as investors judged the index's 29 percent gain since this year's low in October already reflects expectations of a pick-up in demand and profit recovery.
Taiwan Semiconductor Manu-facturing Co (TSMC,
The TAIEX Index declined 92.83, or 2 percent, to 4,455.80, its biggest one-day decline in percentage terms since Oct. 30. Within the index 260 stocks fell and 249 rose. TSMC accounted for half the index's drop.
The index's 14-day relative strength measure, derived by averaging out daily gains and daily losses, was at 76.6 yesterday, above the reading of at least 70 which indicates it's poised to fall.
"In the short term, there may be a little bit of a pullback but stocks are priced cheaply," said David Semple, who manages about US$1 billion in global investments at Van Eck Associates in New York, who has bought shares in United Microelectronics Corp (
The total value of shares traded yesterday was NT$122.1 billion (US$3.5 million), the biggest trading day by volume since April 19.
The following stocks made significant gains or losses: Taiwan Semiconductor Manu-facturing Co fell NT$5, or 6.3 percent, to NT$74.50.
The biggest made-to-order chipmaker dropped on concern its 69 percent surge since Oct. 3 is too far, too fast compared to future earnings. HSBC Securities Asia Ltd analyst Abraham Leu downgraded his recommendation on the stock to "reduce" from "add" because "valuation is stretched and the current share price already reflects 2003 earnings projections."
United Microelectronics Corp, the second-biggest made-to-order chipmaker, fell NT$2, or 5.1 percent, to NT$37.50. The stock has gained 60 percent since Oct 3.
Shares of computer parts makers fell after recent gains and after Robert Parry, president of the Federal Reserve Bank of San Francisco, said yesterday rising unemployment and falling consumer confidence mean the US economy will probably contract during the final three months of this year and early next year.
The US buys about a fifth of Taiwan's exports.
Acer Inc (
Asustek Computer Inc (華碩), the biggest computer motherboard maker in Taiwan whose shares are up 6 percent this month, fell NT$2.50, or 2 percent, to NT$125.
Hon Hai Precision Industry Ltd (
Quanta Computer Inc (
Via Technologies Inc (
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