TAIEX declines on back of slight drop by TSMC

Stocks fell for the first day in four yesterday, led by Taiwan Semi-conductor Manufacturing Co (TSMC, 台積電).

The TAIEX dropped 16.43, or 0.3 percent, to 6,061.46. About three stocks fell for every two that rose. The futures index added 0.03 percent to 6,074.

About 5.6 billion shares changed hands, 34 percent above the average daily trading in the past three months. Shares worth NT$129.3 billion traded, 33 percent above the three-month daily average.

TSMC, the world's largest maker of computer chips on a subcontracting basis, fell NT$1, or 1.5 percent, to NT$67. The stock has gained 70 percent this year, double the rise of the TAIEX. Rival United Microelectronics Corp (聯電) fell NT$0.50, or 1.6 percent, to NT$31.30.

"The semiconductor industry is only recovering slightly and that has already been reflected in the market," said Simon Chao (趙永宏), who helps manage US$305 million at President Investment Trust Corp (統一投信) in Taipei.

China Airlines Co (華航) shed NT$0.10, or 0.6 percent, to NT$15.50 after Singapore Airlines said it isn't planning to buy a stake in China Airlines from the government, denying a Chinese-language newspaper report on Monday.

Novatek Microelectronics Corp (聯詠科技), which makes about 12 percent of the world's computer chips that control flat-panel displays, was unchanged at NT$119 after it raised its profit forecast for this year 51 percent after the close of market on Monday to NT$1.95 billion, citing higher-than-expected growth in flat-panel sales.