Shares close lower as UMC case makes investors cautious

Taiwan share prices closed 1.16 percent lower Thursday, led down by United Microelectronics Corp (UMC, 聯電) amid concerns sparked by a government probe into the company's links with a Chinese chipmaker, dealers said.

They said the market also came under pressure as foreign investors turned more cautious when their local counterparts proved unwilling to follow through on their recent strong support for the market.

The weighted index closed down 71.33 points at the low for the day of 6,072.16 after a high of 6,139.65 on turnover of NT$85.28 billion (US$2.7 billion).

Decliners led risers 619 to 223, with 141 stocks unchanged.

"UMC was no more than an excuse to trigger a pullback that had been poised to occur anyway," First Taisec Securities (一銀證券) fund manager Lee Chien-wei said.

Lee said that recent gains led by foreign investors had not generated the usual local investor follow through, with volumes not expanding enough to support the upside.

The market may only regain momentum if further losses encourages bargain hunting and depending on developments in the UMC probe, he added.

UMC closed down NT$0.90 at NT$19.90.

ProMOS (茂德) lost NT$0.35 at NT$14.00 on after the company gave a relatively lackluster outlook for the global dynamic random access memory chip market this year.

SinoPac Holdings (建華金控) was down NT$0.30 at NT$18.50 after investors failed to respond to reports of a possible merger with International Bank of Taipei (台北國際商銀), which shed NT$0.20 at NT$24.20.