Stocks decline again, led by Taiwan Semiconductor

Stocks fell for a second straight day yesterday, paced by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電).

The declines followed a US government report showed the economy isn't adding jobs as fast as anticipated.

Stocks also fell after President Chen Shui-bian (陳水扁) called for a public vote to label China a military threat. Chen is calling for the vote on March 20.

The TAIEX dropped 52.90, or 0.9 percent, to 5,847.15. The Taiwan Futures Index shed 1 percent to fall to 5,847. Decliners outnumbered gainers more than two to one. The value of trade was NT$47.5 billion, the lowest since May 22.

The political factor will ``have some influence on the market because elections are near,'' said Frank Ding, a fund manager at International Investment Trust Co (國際投信).

"It is difficult to know whether the Democratic Progressive Party will try to provoke a dispute in China-Taiwan relations to boost its standing during the campaign," he said.

Resulting uncertainty "will dampen the overall stock market," he said.

TSMC, the world's biggest supplier of made-to-order chips, dropped NT$1.50, or 2.3 percent, to NT$63.50. Rival UMC fell 90 cents, or 2.9 percent, to NT$29.70.

Cathay Financial Holding Co (國泰金控) fell 50 cents, or 1 percent, to NT$50.50. Cathay Life Insurance Co (國泰人壽), the nation's largest life insurer, is in talks with China Eastern Airlines Group to form a 800 million yuan (US$96.4 million) venture to sell policies in China.

MediaTek Inc (聯發科技), the world's largest maker of chips for DVD players, dropped NT$9, or 2.7 percent, to NT$325. The company said sales last month of NT$3.7 billion were lower than October's NT$4 billion.