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Nvidia's forecast dampens trading on the local bourse

Stocks fell on concern sales growth at the nation's electronics companies will slow after Nvidia Corp said revenue will be unchanged in the fourth quarter, a period when holiday shopping typically boosts sales.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which sells chips to Santa Clara, California-based Nvidia, led declines.

The TAIEX lost 146.36, or 3 percent, to close at 4,664.65, its largest drop since Oct. 7. The benchmark has risen more than a fifth from this year's low of 3,850.04 on Oct. 11.

"People are wondering if the rebound is over," said Louis Lee, who helps manage NT$2 billion (US$58.2 million) at President Investment Trust Corp (統一投信).

Dealers said as the index approached the psychological 5,000 point level, investors also became wary of Wall Street's weakness on Friday amid concerns over the US economic outlook and a possible war in the Middle East.

Rotational play among non-electronic shares proved insufficient to offset the losses in the electronic sector, they added.

"The fact that many non-electronic shares led by China plays [which have close business ties with China] continued to gain ground reflected a pervasive note of optimism on the market outlook" said Michael Hsu, assistant vice president of Fuh Hwa Capital Management (復華投信).

Investors were advised to look for bargains if the market further weakened towards 4,600 points and below as the chances for the benchmark index to fall below 4,500 points in the near term were slim, Hsu said.
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