Stocks fell, led by Cathay Financial Holding Co (國泰金控) and Chinatrust Financial Holding Co (中信金控) on concern gains that helped lift the TAIEX to an 18-month high yesterday more than reflect the outlook for profit.
"The financial stocks have been rising since the second quarter, so some investors who had bought the shares at lower prices may want to sell now," said Parker Wu, a mutual fund manager at Shinkong Investment Trust Co (新光投信).
The TAIEX slid 128.92, or 2.1 percent, to 6013.40, paring its gain in the last three months to 14 percent. The bank/insurance index slumped 4.8 percent. It has surged 25 percent in the same period.
Cathay Financial dropped NT$3.50, or 6.4 percent, to NT$51.
Taiwan's biggest financial services provider has surged 38 percent this year. Chinatrust Financial, the nation's fourth-biggest financial services provider by market value, lost NT$1.60, or 4.6 percent, to NT$33.60, paring gains this year to 32 percent.
After the market closed, First Financial Holding Co (第一金控), which owns Taiwan's fourth-largest bank by assets, dumped a profit forecast. The company said it will make a loss of NT$14.3 billion (US$421 million) this year. Its shares slid NT$0.80, or 3.5 percent, to NT$22.
First Financial predicted the loss, compared with a NT$5.8 billion net income estimate given in January, according to its statement to the Taiwan Stock Exchange. The lender had a loss of NT$18.6 billion in the third-quarter after increasing the money it set aside for bad loans at its bank unit, it said on Oct. 31.
Lite-On Technology Corp (光寶科技), Taiwan's largest maker of computer monitors, rose NT$0.30, or 0.8 percent, to NT$37.70.
October sales more than tripled to NT$10.8 billion after the company absorbed four smaller units, it said. Sales rose from NT$3.4 billion in October a year ago and NT$9.4 billion in September this year.
EVA Airways Corp (長榮航空) dropped NT$0.30, or 1.9 percent, to NT$15.30. The nation's second-largest carrier slid as its 8.3 percent gain this week already reflects optimism about its earnings prospects.
The company had a 34 percent decline in third-quarter profit as sales slipped because of severe acute respiratory syndrome.
Net income fell to NT$868 million from NT$1.31 billion, according to figures derived by subtracting first-half from nine- month earnings posted on the Taiwan Stock Exchange last Friday after the market closed.
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