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Stocks slip on tech worries

Shares ended at a two-and-a-half-month low yesterday, led by chip heavyweights on an uncertain outlook for the technology sector in the fourth quarter.

The Weighted Price Index of the Taiwan Stock Exchange fell 67.94 points, or 1.1 percent, to 6,127.24 -- its lowest level since finishing at 6,105.79 on June 7.

There were 147 gainers, 779 decliners and 112 stocks settled unchanged.

Traders said doubts about the likelihood of a recovery for the technology business by the end of this year was pushing Taiwanese investors toward caution.

"People wonder if the much-anticipated recovery in the tech sector will materialize," said Stanley Chou, Barits Investment Service (倍利投顧) manager.

Local newspaper DigiTimes reported yesterday it doesn't appear that factory use at contract chipmakers will be as tight as some had expected.

"Now people are concerned the fourth quarter may not be as good as they earlier thought," said Shaw Wang, a trader at Fubon Securities Corp (富邦證券).

Taiwan Semiconductor Manufacturing Co (台積電), the world's largest contract chipmaker, fell 1 percent to NT$51.5, while global No.2 United Microelectronics Corp (聯電) dropped 3.1 percent to NT$20.65.

Memory-chip companies extended their losses from Tuesday after the contract price of the mainstream chip fell about 2 percent in the second half of this month, according to DRAMeXchange, an online trading venue for the chips.

Nanya Technology Corp (南亞科技) ended 3.8 percent lower at NT$21.55, after dropping 3 percent in the previous session.

However, dealers said they don't expect the main index to fall much further.

Alex Kao, a vice president at MasterLink Securities Corp, said a rebound was imminent, and shares were unlikely to fall below the 6,100 level.

The index has fallen 5.5 percent since hitting a recent high of 6,481.62 early this month.

Kao said he expects the index to trade between 6,100 and 6,300 the rest of the week.

Steel stocks fell, following reports on Tuesday that China's Baoshan Iron & Steel Co (寶山鋼鐵) will cut prices of its major steel products in the fourth quarter. Traders said Baoshan's move has dashed hopes that China Steel Corp (中鋼) would hike steel prices for the fourth quarter.

China Steel ended 4 percent lower at NT$27.95.
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