TAIEX sheds 3.4% on fear that the US may start war soon

Stocks declined on concern Iraq will fail to comply with a UN order to destroy missiles, bringing the US closer to a war.

Taiwan Semiconductor Manuf-acturing Co (TSMC, 台積電), Far Eastern Textile Ltd (遠東紡織) and Formosa Plastics Corp (台塑) led declines as a war in the Middle East may slow economic growth and boost crude prices.

"War fear is the recurring theme that will continue to keep most investors sidelined," said Phil Chen, who manages Grand Cathay Securities Investment Trust Co's (大華投信) US$46 million High-Tech Fund.

The TAIEX shed 154.85, or 3.4 percent, to close at 4,454.35. MSCI Taiwan futures for February delivery in Singapore fell 4.1 percent to 188.60. The Taiwan Futures Index dropped 3.3 percent to 4450. About 12 stocks declined for every one that gained.

TSMC fell NT$2.30, or 5.1 percent, to NT$43. Far Eastern Textile, the nation's largest textile maker, fell NT$0.90, or 6.7 percent, to NT$12.50. Formosa Plastics declined NT$1.70, or 3.9 percent, to NT$41.90.