Stocks fall, led by Quanta and Hon Hai Precision

Stocks fell for a third day, led by exporters such as Quanta Computer Inc (廣達電腦) and Hon Hai Precision Industry Co (鴻海精密), after a survey showed US companies are planning to cut jobs, damping confidence that a rally in exporters stocks will be maintained.

The TAIEX shed 33.62, or 0.6 percent, to 5225.83. August futures on the benchmark fell 0.5 percent to 5242. Almost three stocks declined for every one that gained. The benchmark index has gained 17 percent this year.

About 2.8 billion shares changed hands, 36 percent below the average trading in the past three months. The value of trading was NT$63.2 billion (US$1.8 billion), 32 percent below the three-month daily average.

"Investors are reluctant to put more money into stocks fearing the recent market rally may have outpaced corporate profit growth," said Celine Chiang (江宜津), who manages the equivalent of US$16 million for Polaris International Securities Investment Trust Co's (寶來投信) Chronicle Fund.

Notebook-computer maker Quanta fell NT$1.50, or 1.8 percent, to NT$81.50. The stock has gained 57 percent this year. Hon Hai, the nation's biggest electronics maker by sales, fell NT$4, or 2.6 percent, to NT$153.

US employers in July announced plans to cut 85,117 jobs, up 43 percent from June and 5.1 percent from July last year, according to a survey by Challenger, Gray & Christmas Inc, a Chicago-based placement firm. That reversed two months of declines in planned job cuts. The US is Taiwan's biggest export market after China.

China Airlines Co (華航) fell NT$0.15, or 1.1 percent, to NT$13.50 as renewed concern about terrorism in Southeast Asia after Tuesday's fatal hotel blast in Jakarta may deter people from traveling.

Advanced Semiconductor Engineering Inc (日月光), fell NT$0.40, or 1.7 percent, to NT$23.50. The company said after stock-market closed yesterday that its second-quarter profit rose almost fivefold to NT$360 million (US$10.5 million) because of a tax benefit.

The Kaohsiung-based company's sales rose to NT$4.6 billion from NT$4.1 billion. The company forecast sales will rise by 10 percent this quarter from the second.

Compal Electronics Inc (仁寶電腦), another maker of notebook computers, rose NT$0.50, or 1 percent, to NT$50.50. Compal reported a 35 percent increase in second-quarter profit after it cut costs by moving more production to China.