The TAIEX had its biggest drop in six months yesterday, led by exporters such as Hon Hai Precision Industry Co (
"Oil is inching back up again, causing uneasiness among investors," said Liu Juming, a fund manager at Ta Chong Investment Trust Corp (
"Concern about bird flu hurting the global economy is there," Liu said.
The TAIEX lost 142.80, or 2.4 percent, to close at 5,826.27, its biggest decline since April 18.
About nine stocks dropped for every one that gained.
Crude oil for delivery next month rose as much as 2 percent to US$63.86 a barrel in Asian trading on concern a hurricane may form in the Caribbean and head for the Gulf of Mexico, disrupting US output.
Hon Hai, the nation's largest electronics company by sales, fell NT$2.50, or 1.7 percent, to NT$144.50. Taiwan Semiconductor Manufacturing Co (台積電), the world's largest supplier of made-to-order computer chips, lost NT$0.50, or 1 percent, to NT$50.60.
"Some technology stocks are being cut because of concern high oil prices and rising interest rates will hurt demand for electronics," said Simon Chao (
"Some institutional investors are adjusting portfolios for the final quarter," Chao added.
The nation's central bank on Sept. 15 raised its benchmark interest rate for a fifth consecutive quarter, lifting its discount rate on 10-day loans to an almost four-year high of 2.125 percent.
Stocks also fell on concerns the bird flu virus may mutate and spread among humans. The government plans to spend NT$3 billion (US$897 million) to cope with a possible outbreak, a Chinese-language newspaper reported yesterday.
The government ran a half-page newspaper ad in the newspaper saying "this is a critical moment" in bird-flu prevention.
"Some investors are looking for excuses to sell shares," said George Hou (
"The bird flu is something worth keeping an eye on," he said.
A possible human influenza mutated from bird flu could infect 5.3 million people in Taiwan and kill about 14,000 if an outbreak occurred, the government said on Aug. 19.
Asian governments want to avoid a repeat of 2003, when travelers shunned the region due to the spread of SARS.
Taiwan's economy contracted 0.12 percent in the second quarter of 2003 from a year earlier as a result of the SARS outbreak.
China Airlines (華航), the nation's largest carrier, dropped on concern higher oil prices will increase fuel costs. China Airlines fell NT$0.25, or 1.7 percent, to NT$14.85. EVA Airways Corp (長榮航空), the second largest, lost NT$0.40, or 2.9 percent, to NT$13.20.
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