Stocks dive into pool of worries

Taiwan stocks fell, led by Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), as the biggest drop in US retail sales in 10 years fanned concern orders from Taiwan's biggest export destination may further slump.

The TWSE Index fell 88.68, or 2.3 percent, to 3712.82, the biggest drop in two weeks. Within the index, 388 stocks fell and 61 rose. The total value of trade was NT$32 billion (US$926 million), a third lower than the six-month daily average of NT$47.5 billion.

"The retail numbers will drag down export-related stocks," said Yu Wei-kuo, who manages NT$130 million in stocks at Polaris Investment Trust Corp (寶來投信).

"You can't see any positive news after the Sept. 11 attacks."

Taiwan exports to the US fell by almost half in September.

Fearing more terrorist attacks, investors said the TWSE Index's 6 percent gain last week was overdone. In the US, there have been three confirmed cases of anthrax.

The anthrax scare is an uncertainty and an excuse for profit-taking," said Sophia Pan, who manages NT$1.1 billion in stocks at Fuh Hwa Investment Trust Ltd (復華投信).

Semiconductor and computer makers fell on concern falling retail sales in the US will damp overseas orders for PCs and the chips used to run them.

TSMC, the biggest made-to-order chipmaker, fell NT$1.5, or 2.7 percent, to NT$53.50. TSMC's American depositary receipts fell 2.7 percent to US$10.90 on Friday.

United Microelectronics Corp (UMC, 聯電), the second-biggest made-to-order chipmaker, fell US$0.80, or 2.7 percent, to NT$28.60. UMC's ADRs dropped 2.4 percent to US$5.64.

Asustek Computer Inc (華碩), Taiwan's biggest computer motherboard maker, fell NT$5.5, or 4.6 percent, to NT$115.50. Hon Hai Precision Industry Ltd (鴻海), the maker of everything in a computer except chips, fell NT$1.50, or 1.2 percent, to NT$127.

China Airlines Co (華航) fell US$0.55, or 5.3 percent, to NT$9.85. Taiwan's largest carrier slashed its 2001 pretax profit forecast by 57 percent to US$40 million as the Sept. 11 terrorist attacks in the US cut air travel demand. EVA Airways Corp (長榮), the nation's second- largest carrier, fell US$0.40, or 6.3 percent, to NT$5.95.

The airline cut its 2001 forecast to a loss of NT$3.35 billion on Aug. 31, prior to last month's terrorist attacks in the US, and doesn't plan to revise the forecast again.

Premier Image Technologies Corp (普立爾) fell NT$3.2, or 6.8 percent, to NT$43.80 after Polaroid Corp filed for bankruptcy protection. Polaroid is a customer of Premier and Tecom Technologies Inc, which Premier plans to buy.

Taishin International Bank (台新銀) fell US$0.45, or 3.5 percent, to NT$12.60. Taiwan's second-largest credit card issuer will buy rival Dah An Commercial Bank (大安銀) to strengthen its business, the Commercial Times reported. Dah An fell US$0.40, or 7 percent, to NT$5.35.

Via Technologies Inc (威盛) rose US$0.50, or 0.6 percent, to NT$79.50.

The second-largest chipset seller will start making computer motherboards in competition with customers.