Investors drop finance stocks

Stocks dropped for a third day, led by Cathay Financial Holding Co (國泰金控) after investors judged the past week's gain by finance companies as a group was excessive as the economy may not recover as soon as expected.

Acer Inc (宏電), Quanta Computer Inc (廣達電腦) and other computer-related companies declined after International Business Machines Corp said first-quarter profit fell short of forecasts.

The TAIEX fell 120.98, or 2 percent, to 6069.85. The TWSE Bank/Insurance Index fell 4.4 percent, paring its 9.1 percent rally since April 1.

About seven shares fell for every one that rose in the TAIEX. About NT$103 billion (US$2.9 billion) in shares changed hands, below the six-month daily average of NT$115 billion.

Finance companies fell. The 14-day relative strength measure for the bank index, which is derived by averaging out daily gains and daily losses over a set period, rose to 72.23 yesterday, indicating the index was poised to fall. A relative strength value of 25 or below indicates the index is poised to rise, while a value of 75 or above indicates it's set to fall.

Cathay Financial Holding shed NT$2.50, or 4.7 percent, to NT$50.50. Hua Nan Financial Holdings Co (華南金控) lost NT$1.40, or 6.7 percent, to NT$19.60. Chang Hwa Commercial Bank (彰化銀行) dropped NT$1.20, or 6.7 percent, to NT$16.80.

Companies that make computers and other parts for IBM dropped after the world's largest computer maker said first-quarter profit fell short of forecasts.

Acer, which makes computers for IBM, dropped 90 cents, or 1.8 percent, to NT$49.10. Quanta, Taiwan's largest notebook computer maker, fell NT$2.50, or 2.1 percent, to NT$119.50.

Some computer-memory-chip makers rose after the price of a 128-megabit memory chip gained 4 percent, its biggest advance since Feb. 19, according to DramExchange, a market place for memory chips.

Nanya Technology Corp (南亞科技), Taiwan's largest computer-memory-chip maker by market value, rose NT$0.80, or 2 percent, to NT$41.10. Mosel Vitelic Inc (台灣茂矽), the third largest, rose NT$0.60, or 3.6 percent, to NT$17.50. ProMos Technologies Inc (茂德科技) rose NT$0.70, or 2.5 percent, to NT$29.10.

Benq Corp (明電) rose NT$0.50, or 0.7 percent, to NT$72. Taiwan's largest mobile phone maker reported first-quarter sales almost doubled to a record NT$23.4 billion.

China Development Financial Holding Corp (中華開發金控) fell NT$1, or 4.1 percent, to NT$23.20. Taiwan's second-largest financial holding company reported first-quarter profit dropped almost a quarter to NT$4.1 billion because of smaller investment gains.

Enlight Corp (英誌) fell NT$0.10, or 0.6 percent to NT$18.10. The computer case maker said it planned to sell as many as 80 million shares overseas to pay back foreign currency debt. At today's closing price, the sale would generate NT$1.4 billion.

Yageo Corp (國巨) rose NT$0.20, or 0.6 percent, to NT$32. Taiwan's largest maker of parts that control the flow of electricity in personal computers said March sales rose 41 percent to NT$1.4 billion from the previous month.