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Oil worries have depressing effect on the TAIEX

Shares declined yesterday on continued concerns over high oil prices and after a mixed session on Wall Street.

The TAIEX fell 46.15 points, or 0.7 percent, to 6,158.94, on turnover of NT$63.42 billion (US$1.96 billion). The index has declined for 11 sessions in a row, losing 4.6 percent since Aug. 4.

"The market is still focused on oil, and institutional investors remain on the sidelines," said Capital Securities Corp (群益證券) senior vice president Daniel Hsin (辛日祺).

Since Taiwan imports all of its oil, higher oil prices cause investors to worry about rising inflation and slower growth. Hsin said the index may soon approach 6,120, "unless oil drops to under US$60 per barrel."

The technology subindex lost 1.1 percent yesterday.

The world's largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), whose market capitalization is about 10 percent of the entire bourse, fell 0.8 percent to close at NT$51.60, while rival United Microelectronics Corp (聯電) closed at NT$20.80, down 2.1 percent.

Dynamic-random-access-memory makers fell on falling spot prices for the mainstream memory chip type.

Over-the-counter traded Powerchip Semiconductor Corp (力晶半導體) fell 0.9 percent to NT$22.60, while ProMOS Technologies Inc (茂德科技) shed 0.8 percent to close at 12.10. Nanya Technology Corp (南亞科技) closed down 0.9 percent at NT$22.85.

Over-the-counter traded Far EasTone Telecommunications (遠傳電信) gained 1.3 percent to close at NT$40.50 after the company reported on Thursday that its stock will be upgraded to the mainboard on Aug. 24.
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