TAIEX drops 1.2 percent as bird flu worries increase

Stocks declined in above-average trading yesterday, led by AU Optronics Corp (友達光電), after comments by the US Federal Reserve suggested borrowing costs may increase for US consumers and companies.

Insurers such as Cathay Financial Holding Co (國泰金控) and Fubon Financial Holding Co (富邦金控) fell due to concern that the spread of bird flu in Taiwan will hurt consumer confidence. New cases of the disease have been found in ducks at a farm in southern Taiwan, AFP said, citing unidentified agricultural officials.

The TAIEX dropped 73.60, or 1.2 percent, to 6,312.65. About three stocks fell for every two that gained. The Taiwan Futures Index shed 0.6 percent to 6,331.

About 6.8 billion shares changed hands, 72 percent above the average daily trading in the past three months. Shares worth NT$151.8 billion (US$4.5 billion) traded, 77 percent above the three-month daily average.

AU Optronics, the nation's largest maker of flat-panel displays for personal computers, fell NT$1.60, or 3.3 percent, to NT$47.20. Taiwan Semiconductor Manufacturing Co (台積電), the world's largest maker of computer chips on a subcontracting basis that counts on the US for three-quarters of its sales, shed NT$1, or 1.5 percent, to NT$66.50.

Cathay Financial, the country's largest life insurer, fell NT$2, or 3.6 percent, to NT$54. Fubon Financial, the nation's largest property insurer, fell NT$0.80, or 2.4 percent, to NT$32.80.

Accton Technology Corp (智邦科技), a maker of computer-network equipment, fell NT$1.40, or 4.5 percent, to NT$29.50. It rose 5.8 percent yesterday.