Stocks fell for the third day in four. China Airlines Co (華航) declined after President Chen Shui-bian (陳水扁) said direct transport links with China aren't an economic cure-all for the nation.
The TAIEX fell 5.16, or 0.1 percent, to close at 4,945.87. Nearly one stock rose for every one that declined. Total trading was NT$124 billion.
China Airlines fell NT$0.5, or 3.1 percent, to NT$15.7.
Chen cited lackluster demand for charter flights between Taiwan and Shanghai during the Lunar New Year holiday. Travel agents have sold about half of the 1,600 seats on 16 flights operated by six Taiwanese carriers.
Quanta Display Inc (
"Makers like AU Optronics have good chances to turn profitable this quarter," said Phil Chen, a securities manager.