TAIEX drops after UMC forecasts 2Q operating loss

Taiwan stocks fell, led by United Microelectronics Corp, (聯電) after the chipmaker said it expects to post an operating loss in the second quarter as customers order fewer semiconductors.

The TWSE Index fell 88.11, or 1.7 percent, to 5,070.52. Within the index, 355 stocks fell, 89 rose, and 64 were unchanged. Trade at NT$31.4 billion (US$911 million) was the second lowest this year and 61 percent lower than the six-month daily average of NT$80.9 billion.

UMC fell NT$2.50, or 4.8 percent, to NT$50. The company said it expects to post a loss in the second quarter ending June 30 as customers order fewer computers, telecommunication and consumer electronics chips.

Taiwan Semiconductor Manu-facturing Co (台積電) fell NT$1.50, or 1.6 percent, to NT$92. Winbond Electronics Corp (華邦電子) fell NT$0.90, or 3 percent, to NT$29.10. Mosel Vitelic Inc (台灣茂矽) fell NT$1, or 5 percent, to NT$19.20.

Further damping investor sentiment, Taiwan's currency continued to fall against the US dollar, eroding the value of foreign investors' stock holdings.

Foreign institutional investors hold 40 percent in Bank Sinopac (華信銀行), 31 percent in Hon Hai Precision Industry Co (鴻海精密), and 30 percent in Procomp Informatics Co (博達電子), according to the Taiwan Stock Exchange.

Bank Sinopac, the most popular bank with foreign investors, fell NTY$0.20, or 1.3 percent, to NT$15.50. Hon Hai fell NT$3, or 1.6 percent, to NT$183. Procomp fell NT$1, 1.4 percent, to NT$70.

Acer Inc (宏電) fell NT$0.70, or 3 percent, to NT$22.30. The computer maker said it fired about a third of its workforce at its Malaysian factory as part of a reorganization plan to cope with falling sales and to boost profit.

Chunghwa Telecom Co (中華電信) fell NT$1, or 1.7 percent, to NT$58. Yageo Corp (國巨) fell NT$1.1, or 3.4 percent, to NT$31.60. The company plans to raise NT$10.5 billion in the third quarter to finance expansion and pay off bank loans.