Airlines nosedive on TAIEX as SARS concerns increase

Stocks led by China Airlines Co (華航) and EVA Airways Corp (長榮), on concern travel in the region will decrease after a patient in Singapore tested positive for SARS in preliminary tests.

China Motor Co (中華汽車) and Yulon Motor Co (裕隆), which count China as a manufacturing base, also declined. SARS disrupted tourism and business travel throughout Asia earlier in the year, with Taiwan imposing home quarantine on people who had returned from infected areas such as China.

"The fear of SARS making a comeback should be short-lived," said Mike Shiao, who manages the US$12 million Taiwan Select Growth Fund at Invesco Taiwan Ltd (景順投信). "Businesses in Asia have learned how to prepare for the disease."

The TAIEX shed 46.32, or 0.8 percent, to 5,680.69. The benchmark rose as much as 1.3 percent in earlier trading. About three stocks declined for every one that gained. The futures contract for September delivery fell 0.8 percent to 5,709.

China Airlines, the nation's largest carrier, dropped NT$0.3, or 2.1 percent, to NT$13.85. Eva Airways tumbled NT$0.8, or 5.6 percent, to NT$13.50.

Yulon Motor fell NT$0.7, or 1 percent, to NT$39.5. China Motor shed NT$2, or 3.5 percent, to NT$56.

Chunghwa Telecom Co (中華電信) lost NT$0.2, or 0.4 percent, to NT$48.

TSMC down NT$0.5 to NT$70.5, while UMC rose NT$0.6, or 2 percent, to NT$30.2. UMC said it plans to sell as many as 17 million shares of affiliated Novatek Microelectronics Corp (聯詠). The stake is valued at NT$1.7 billion based on Novatek's closing price of NT$98 on Monday.