Taiwan stocks fell as manufacturers received fewer overseas orders and cut production last month, a sign the nation's recession may extend into next year.
Taiwan Semiconductor Manu-facturing Co (TSMC,
"Where will the returns for electronics companies come from?" said Jan Lee, the Asia strategist at Bayerische Hypo-und Vereinsbank AG, which manages about US$1billion in Asian investments. "The industry is suffering form over-production."
The TAIEX slid 83.35, or 1.8 percent, to 4,450.02, after rising as much as 0.5 percent. Within the index, 324 stocks fell and 144 rose.
The index's 14-day relative strength measure, derived by averaging out daily gains and daily losses, was at 71.5 yesterday, above the reading of at least 70 which indicates it's poised to fall. Since Oct. 3, it's rallied 30 percent.
The market "wants to take a break as things have gotten too hot," said Steven Hsieh, who manages about NT$2.5 billion (US$72 million) at Dresdner Asset Management Taiwan Ltd. Still, "it won't fall by much."
He predicts the index will trade between 4,100 and 4,700 between now and the elections on Dec. 1.
The total value of shares traded on the market today was NT$78 billion (US$2.3 billion) down from NT$122.3 billion Monday and NT$83.9 billion yesterday.
Chipmakers and computer makers fell on expectations any recovery in demand will be muted and unlikely to boost earnings significantly. Export orders fell 12.31 percent to US$11.98 billion from a year earlier after dropping a record 26.8 percent in September, the government said. Factory production dropped 6.73 percent. Both fell for an eighth month.
TSMC fell NT$2.50, or 3.3 percent, to NT$73. UMC fell NT$2.10, or 5.4 percent, to NT$37.
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