Taiwan stocks fell, paced by AU Optronics Corp (友達光電) and other flat-panel-display makers, on concerns a water shortage will increase companies' cost of maintaining sufficient supplies.
The TAIEX fell for the first day in five by 64.64, or 1.1 percent, to 5742.66 as rains over the weekend didn't increase the water levels at Taipei City's main reservoir. More than three stocks dropped for every one that gained. The value of trade reached a six-month-low of NT$49.7 billion (US$1.4 billion).
AU Optronics shares fell NT$1.7, or 3.3 percent, to NT$49.8 on concern flat-panel prices will slow this quarter from the first three months of this year. AU Optronics shares jumped 35 percent in the first quarter. Stocks also fell as investors sold them to raise funds to pay taxes this month.
"The water shortage concern has been continuing, while the increase of flat-panel prices, which drove stocks in the first quarter, isn't expected to be as fast this quarter," said Cheng Yi-sheng, who helps manage NT$150 million at Taiwan Securities Co (台証證券). He isn't buying as many shares after selling some of the major electronics stocks earlier this quarter.
UMC (聯電) fell NT$1.1, or 2.2 percent, to NT$48.7, tracking the 3.4 percent decline in its US-traded shares on Friday on concern over slowing economic growth. The world's second-biggest maker of chips on a subcontracting basis also topped the list of foreign investors' sales -- a widely watched indicator -- on Friday in Taiwan.
MediaTek Inc (聯發科技) fell NT$25, or 4.2 percent, to NT$564 after the Commercial Times reported that Taiwan's second-largest chip designer is prepared to cut its gross margin to 10 percent from 50 percent to fend off rivals.
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