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Stocks fall amid caution over surging oil prices

Stocks fell yesterday, taking the benchmark index to its fourth weekly slide in six, as oil prices surged to a record.

A technical bounce back pushed the index higher mid-morning, but with investors jittery over oil prices and weak global markets, profit-taking soon emerged to pull the market lower, the dealers said.

Firms testing and packaging integrated circuits gained, but wafer foundries and some thin-film-transistor liquid-crystal display panel makers were weaker, dragging the broader electronics sector lower.

The TAIEX shed 28.45, or 0.5 percent, to 5,399.16. About three shares fell for every two that rose. The index futures for August lost 0.6 percent to 5,369. The TAIEX fell 0.4 percent this week.

The weighted index lost 21.41 points, or 0.39 percent, over the week until today. Last week the index rose by 0.83 percent.

"Investors are reluctant to build new positions or hold shares for long due to uncertainties over surging oil prices," said Alan Tseng, an assistant manager at Capital Securities Corp (群益證券).

A strong rebound was unlikely unless crude oil costs stabilized and foreign funds returned to the bourse, Tseng said.

Taiwan Semiconductor Manu-facturing Co (台積電) lost 2.2 percent to NT$44, while rival United Microelectronics Corp (聯電) fell 2.7 percent to NT$22.

AU Optronics Corp (友達光電), the nation's largest flat-panel maker, fell 2.4 percent to NT$40.2 due to a bleak outlook for panel prices and demand in the coming months, while rival Chi Mei Optoelectronics Corp (奇美電子) rose 2.9 percent to NT$42.10 after it reported a record profit on Thursday for the second quarter.

Chinatrust Financial Holding Co (中信金控), the nation's sixth-biggest financial services company, added 0.3 percent to NT$34.30. It said second-quarter net income fell 11.6 percent to NT$3.43 billion, from NT$3.88 billion a year earlier because of losses from stock trading.
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