Stocks fell for a second day yesterday, led by exporters such as Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), on concern a gain in the NT dollar against the US dollar may curb overseas demand.
The TAIEX dropped 38.22, or 0.6 percent, to 5,895.35. The index fell 0.8 percent in two sessions. More than two stocks declined for every one that gained.
Futures due in this month dropped 1 percent, to 5,885.
"The NT dollar's appreciation will remain a threat to Taiwanese exporters going forward," said Phil Chen, who helps manage the equivalent of US$1.9 billion in assets at Grand Cathay Securities Investment Trust Co (大華投信).
"That's especially troublesome for technology exporters that count on margins," he said.
TSMC, the world's largest supplier of made-to-order computer chips, fell 2.9 percent to NT$47.70. United Microelectronics Corp (
The NT dollar rose NT$0.091 to close at NT$31.802 against the US dollar in Taipei.
The currency will probably rise to NT$31.80 by the end of the first quarter, said Sabrina Jacobs, a currency strategist in Singapore at Dresdner Kleinwort Wasserstein.
Analysts said the declines in chip shares could also be due to the widespread view global demand for semiconductors won't be strong in the first half of the year.
"Foreign investors may be reducing their holdings in the semiconductor sector overall," said Andrew Teng (