TAIEX sags, led by China Motor and Formosa Plastics

A TAIEX decline was led yesterday by China Motor Co (中華汽車), which manufactures Mitsubishi Motors Corp cars in Taiwan, after DaimlerChrysler AG withdrew financial support for a US$6.4 billion rescue plan for Mitsubishi.

Formosa Plastics Corp (台塑) fell following an explosion Friday at the company's plant near Springfield, Illinois, which killed four workers and injured eight.

The TAIEX lost 37.40, or 0.6 percent, to close at 6,710.70. More than three stocks declined for every one that gained. Futures due in May shed 0.4 percent.

China Motor fell 5.1 percent, its biggest one-day drop since March 23, to close at NT$56. Yoichiro Okazaki, who is to become chairman at Mitsubishi Motors, and must raise money the company, now has to find a new plan to revive the automaker after DaimlerChrysler balked at the bail-out plan.

Formosa Plastics, the nation's largest manufacturer of polyvinyl chloride, shed 0.9 percent to close at NT$53.50. Formosa Petrochemical Corp (台塑石化), the country's largest private oil refiner, which is affiliated with Formosa Plastics, shed 0.9 percent to close at NT$56.

AU Optronics Corp (友達光電), the nation's largest maker of flat-panel displays used in computers and televisions, gained 4.1 percent to close at NT$76.

"Investors still favor companies like AU Optronics with strong first-quarter profits," said Celine Chiang (江宜津), a fund manager for Polaris International Securities Investment Trust Co (寶來投信). "Their shares are likely to outperform," she said.

Chunghwa Telecom Co (中華電信) shed 0.9 percent to close at NT$55.50. The company is to release first-quarter earnings today.