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TSMC leads decline as TAIEX falls for a second straight day

Stocks fell for a second day yesterday. Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) led shares of the nation's largest companies lower on concern pro-fit growth may not justify the benchmark's rally to a 15-month high.

"Sales growth has been reflected in stock gains," said Darwin Chang (張達文), who helps manage the equivalent of US$47 million in equities at Reliance Securities Investment Trust Co (德信投信).

"Now, we must wait for a sustained recovery in corporate profits," he said.

The TAIEX shed 57.26, or 1 percent, to 5,623.43, extending Tuesday's 0.8 percent drop. The index rose to 5,727.01 on Monday, its highest close since May 30 last year. More than four stocks fell for every one that gained.

Shares worth NT$90 billion (US$2.6 billion) changed hands, 18 percent lower than the three-month daily average. The futures contract for September delivery fell 1 percent to 5,652.

TSMC fell NT$1, or 1.4 percent, to NT$69.50. The company had surged 79 percent in the year to Tuesday.

Cathay Financial Holding Co (國泰金控), the fifth biggest company on the TAIEX, dropped NT$1.90, or 4.4 percent, to NT$41.10, paring its gains this year to 11 percent.

China Airlines Co (華航) and EVA Airways Corp (長榮) dropped on the concern that SARS may spread across the region a second time, halting a recovery in the region's travel industry. China Airlines lost NT$0.35, or 2.5 percent, to NT$13.50. EVA fell NT$0.70, or 5.2 percent, to NT$12.80.

Hon Hai Precision Industry Co (鴻海精密) rose NT$4, or 2.7 percent, to NT$154.
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