Stocks decline further on fears of higher oil prices

Stocks declined for a sixth day in seven yesterday, led by Nan Ya Plastics Corp (南亞塑膠) and other makers of petrochemicals, on concern military conflict in the Middle East may boost crude oil prices further.

"A US war with Iraq can disrupt crude oil supplies in the Middle East," said Jerry Chen, who manages the NT$3.5 billion (US$101 million) Excellent Fund at First Global Investment Trust Co (元大投信).

However, chipmakers rallied yesterday. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) repeated earlier expectations of a rebound in business starting in the second quarter, a local newspaper reported, citing chairman Morris Chang (張忠謀).

The TAIEX fell 13.97, or 0.3 percent, to close at 4,493.99. About five stocks fell for every three that gained. Trading was worth NT$55.5 billion (US$1.6 billion), or 35 percent below the daily average in the past three months.

Crude oil rose to a 28-month intraday high after the US said the UN may rule Iraq has built missiles that breach arms resolutions, raising concern the allies will speed their war plans against the Gulf producer.

Nan Ya Plastics fell NT$0.30, or 0.9 percent, to NT$34.80. Taiwan Styrene Monomer Corp (台苯), the nation's largest maker of styrene monomer, fell NT$2.20, or 6.2 percent, to NT$33.40.