Profit-taking leads to drop in TAIEX of over 47 points

Shares closed down yesterday as recent gains started to give way to the early stages of a technical correction, dealers said.

Weakness in US shares overnight set the tone for the local market, giving investors an excuse to take profits, dealers said.

The TAIEX fell 47.24, or 1 percent, to close at 4,554.13. More than seven stocks declined for every two that rose.

Sinopac Securities Corp (建華證券) analyst Teng Ke-hsin said the market was due for consolidation after recent solid gains.

"We do not expect a major correction though, as market turnover was kept at a reasonably modest level," he said.

Chipmaking giant United Microelectronics Corp (聯電) fell 1.6 percent to NT$25.4 ahead of its third-quarter investor conference slated for today.

Analysts expect UMC to give a bleak picture for fourth-quarter business conditions, in keeping with the tone from several local tech companies that have already released gloomy quarterly numbers.

Taiwan Semiconductor Manufacturing Co (台積電) closed up NT$0.20 at NT$46.80. MediaTek Inc (聯發科技), the world's biggest designer of chips for DVD players, fell 0.9 percent to NT$322.

Pioneer Corp, Japan's biggest maker of car-navigation systems, is buying chips from Via Technologies Inc (威盛電子) to make DVD players, instead of from Mediatek, a local newspaper reported.

Benq Corp (明電) rose NT$0.40, or 0.8 percent, to NT$48.70. Taiwan's biggest mobile-phone maker expects fourth-quarter sales to rise 15 percent from the previous three months as shipments of flat-panel monitors surge.