Fri, Jun 04, 2004 - Page 11 News List

Fears over tight oil supply hit TAIEX, forcing sharp drop

AP , TAIPEI

Shares ended sharply lower yesterday as the rebound in oil prices fueled fears that oil-producing nations won't raise production as much as the market had hoped, dealers said.

The TAIEX finished down 204.22 points, or 3.5 percent, at 5,671.45 in trading valued at NT$85.15 billion (US$2.53 billion).

Decliners well outnumbered advancers 821 to 60, while 88 issues ended the day unchanged.

The recent oil price rebound has "rekindled worries tight oil supplies will send prices higher despite OPEC's promise to increase production," said Andrew Teng, deputy sales manager at Taiwan International Securities in Taipei.

Fears that US chip giant Intel might disappoint investors when it gave its mid-quarter update yesterday in the US also hurt shares, he said.

Chip issues led the decline, with the world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (台積電), down 4.5 percent to NT$53 and rival United Microelectronics Corp (聯電) off 5.9 percent at NT$25.6.

Computer memory chipmakers also dropped, with Nanya Technology Corp (南亞科技) losing 6.8 percent to NT$23.4 and rival Powerchip Semiconductor Corp (力晶半導體) falling 6.7 percent to NT$26.6.

There were also growing fears that China may be planning to make aggressive moves to hurt Taiwan's economy ahead of the year-end legislative elections, dealers said.

China is slated to hold military exercises off its southern coast this month. Beijing has already said Chi Mei Group (奇美) founder Hsu Wen-lung (許文龍), isn't welcome to invest in China.

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