The TAIEX fell for a fourth day, led by United Microelectronics Corp (UMC, 聯電), after the Nasdaq Composite Index's decline spurred concern a US economic rebound has failed to stoke demand for computer and telecommunications products.
Hon Hai Precision Industry Co (鴻海精密) rose after the nation's biggest maker of computer cables and connectors said first-quarter sales rose almost two-fifths to NT$42.8 billion (US$1.2 billion.) The TAIEX fell 10.64, or 0.2 percent, to 6059.21. Within the index, 326 stocks fell, 191 rose and 46 were unchanged. The total value of trade was NT$90.7 billion (US$2.6 billion), more than a fifth below the six-month daily average of NT$115 billion.
The index has risen 47 percent in the past five months on optimism an economic recovery in the US will boost demand for the nation's computers, semiconductors and other electronics. The US is Taiwan's second-largest export market.
"The market's already factored in an economic recovery," said David Chu, who manages NT$700 million at Reliance Securities Investment Trust Co (德信證券投信).
The Nasdaq, 52 percent of whose market value is composed of computer and telecommunications stocks, slumped to its lowest since Feb. 28 on Tuesday. Electronics stocks make up 63 percent of the value of the TAIEX.
Made-to-order chipmakers fell after the Philadelphia Semiconductor Index, a price-weighted index of 17 companies that design and make chips, fell 3.2 percent to its lowest since Feb. 28 after Verizon Communications Inc and Nortel Networks Corp said profit and sales are trailing forecasts.
Taiwan Semiconductor Manu-facturing Co (TSMC, 台積電), the world's largest made-to-order chipmaker, fell NT$1, or 1.1 percent, to NT$90.50. UMC, TSMC's largest rival, fell NT$1.50, or 2.9 percent, to NT$50.50.
Hon Hai rose NT$6, or 4.1 percent, to NT$151. Taiwan's largest maker of computer cables and connectors reported sales in March rose 30 percent on year to NT$16.4 billion. First-quarter sales rose 38 percent to NT$42.8 billion.
J.P. Morgan Taiwan Securities Ltd raised its recommendation for Hon Hai to "buy" from "market performer," further boosting investor sentiment.
Asustek Computer Inc (華碩電腦) rose NT$1.50, or 1.1 percent, to NT$140.50. Taiwan's largest computer motherboard maker said sales in March fell more than a tenth on year to NT$7.1 billion.
Cathay Financial Holding Co (國泰金控) fell 70 cents, or 1.4 percent, to NT$49.80 after Taiwan's biggest financial company by market value said it plans to sell as much as US$1 billion of bonds convertible into its shares to overseas investors.
Premier Image Technology Corp (普立爾) rose 50 cents, or 0.7 percent, to NT$71.50 after the world's largest maker of compact cameras said it expects profit to increase by about a quarter this year as it sells more digital cameras with higher profit margins.
Quanta Computer Inc (廣達電腦) rose NT$1, or 0.8 percent, to NT$120.50. Taiwan's largest notebook computer maker said sales in March rose 8 percent from a year ago to NT$14 billion as customers such as Apple Computer Inc placed more orders.
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