Taiwanese stocks declined yesterday, lead by Asustek Computer Inc (華碩電腦) and other large caps, before the nation's central bank decided to raise borrowing costs to contain inflation.
"The central bank has made price control its top priority," said Vickie Hsieh (謝雯霞), who helps oversee US$1.4 billion at President Investment Trust Corp (統一投信) in Taipei. "But the flipside of that is economic growth may slow."
Taiwan Semiconductor Manu-facturing Co. (TSMC, 台積電) lead declines among chipmaker stocks after an industry research report said sales of semiconductor machinery would drop next year, raising concerns about growth.
Hon Hai Precision Industry Co (鴻海精密), which makes iPods and iPhones for Apple Inc, led exporters lower after holiday sales at US retailers declined for the third week, heightening concerns about a slowdown in the world's biggest economy.
The TAIEX index fell 157.23, or 2 percent, to close at 7,857.08 yesterday. About nine stocks declined for every one that rose.
The benchmark rose as much as 0.4 percent earlier as the low volume of shares traded made stock prices more volatile in response to buying and selling. About 3.6 billion shares worth NT$89 billion (US$2.7 billion) changed hands, compared with an average NT$140 billion trading value in the past three months.
"Many market participants are getting into year-end holiday mode, drying up trading activity," Hsieh said.
Asustek, Taiwan's largest maker of motherboards, dropped NT$4.20, or 4.3 percent, to NT$93.50. Delta Electronics Inc (台達電), the world's biggest maker of computer power systems and chargers, fell NT$4.50, or 4.2 percent, to NT$102.50.
AU Optronics Corp (友達光電), the nation's largest liquid-crystal-display panel maker, slid NT$1.50, or 2.7 percent, to NT$54. Acer Inc, the nation's biggest personal computer company, fell NT$1.70, or 2.8 percent, to NT$58.30.
TSMC, the world's biggest supplier of made-to-order chips, dropped NT$0.20, or 0.3 percent, to NT$59. Mediatek Inc (聯發科), the nation's biggest chip designer, fell NT$12, or 3 percent, to NT$391.
Sales of semiconductor machinery will fall 9.9 percent next year, the Gartner Inc report said. Spending on the equipment would decline to US$40.3 billion from an estimated US$44.8 billion this year, the Stamford, Connecticut-based researcher said.
Hon Hai, the nation's biggest electronics exporter, declined NT$1.50, or 0.8 percent, to NT$187.50. Quanta Computer Inc (廣達電腦), the world's largest maker of notebook computers, dropped NT$0.85, or 1.9 percent, to NT$43.70. Quanta supplies laptops to clients such as Hewlett-Packard Co and Dell Inc.
Holiday sales at US retailers declined for the third straight week as winter storms and rising gasoline prices discouraged shoppers during the worst holiday season in five years. Sales fell 0.4 percent in the week through Dec. 15 compared with a year earlier, ShopperTrak RCT Corp said on Wednesday. The US is Taiwan's largest overseas market after China and exports account for about half of the nation's economy.
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