TAIEX declines, led by United Microelectronics

Stocks fell for a second day, led by United Microelectronics Corp (聯電) after its Japanese unit lowered its profit forecast.

Dealers said investors clearly wanted to square positions ahead of the Lunar New Year holiday, with some likely having to cover loans taken out to buy stocks in the recent run-up.

The TAIEX lowered 9.49, or 0.2 percent, to close at 6210.22. TAIEX futures for January delivery fell 21, or 0.3 percent to 6254. Decliners outnumbered gainers 472 to 271 with 205 stocks unchanged. Trading totaled NT$89.76 billion (US$2.66 billion), down from NT$90.92 billion (US$2.7 billion) on Monday.

"With the long break to start soon, investors prefer to take profit now although the [upward] momentum should continue when the market resumes trading after the Lunar New Year holiday," said Tu Jin-lung (杜金龍), Grand Cathay Securities Corp (大華投信) executive vice president.

Tu expects the benchmark index to breach 6,400 points soon after the market resumes trading in the Year of the Monkey.

Friday will be the last trading session for the Year of the Sheep.

UMC lost NT$0.50, or 1.6 percent, to NT$31.0. UMC Japan, the Japan unit of the world's No.2 supplier of made-to-order semiconductors, plunged 16 percent after cutting its full-year profit forecast by a fifth to ?2.05 billion.

Taiwan Cellular Corp (台灣大哥大) rose NT$0.10 to NT$31.40 after the company and unit TransAsia Telecom (泛亞電信) sold a combined 122 million shares in Chunghwa Telecom Co (中華電信).