The TAIEX had its biggest decline in almost two months yesterday. Taiwan Semiconductor Manufacturing Co (台積電) and Hon Hai Precision Industry Co (鴻海精密) led exporters lower after some US companies indicated profit or sales may not be as high as investors anticipated.
The TAIEX fell 89.63, or 1.5 percent, to 5,952.23. It was the biggest drop since Aug. 26.
The value of trade was NT$94.2 billion (US$2.8 billion), about 3.5 percent lower than the daily average in the past three months.
More than seven stocks fell for every two that gained. The Taiwan Futures Index dropped 1.8 percent to 5,945.
"Poor earnings reports in the US sparked concerns among investors about Taiwanese companies' profit growth," said Phil Chen, a fund manager at Grand Cathay Securities Investment Trust Co (大華投信).
"Investors will have to re-examine their stocks to screen out poor performers," he said.
The US is the nation's second-biggest export market.
In the US, Merck & Co, the second-biggest US drugmaker by sales, said earnings growth won't be as strong as previously forecast.
US companies including Merck, and telephone operator AT&T Corp, also announced job cuts.
The announcements prompted concern that the US economy is unlikely to create enough jobs to sustain the recent pace of growth.
TSMC dropped NT$1.50, or 2.3 percent, to NT$64.50. Hon Hai Precision fell NT$4, or 2.5 percent, to NT$154.
United Microelectronics Corp (聯電) dropped NT$1.10, or 3.5 percent, to NT$30.20.
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