The TAIEX had its biggest decline in almost a month, led by Chunghwa Telecom Co (中華電信), after the company said it will cut call rates amid heightened competition and a deteriorating economy.
Adding to losses, Formosa Group (
The TAIEX fell 132.75, or 2.9 percent, to 4,447.58 -- its biggest one-day percentage drop since Oct. 30. Five stocks fell for every one that rose. The index surged 29 percent since its year-low on Oct. 3.
"There could be some profit-taking,'' said Roland Wee, who helps manage about US$950 million in Asian stocks at ING Investment Management Asia. "I don't see the index going above 5,000."
The total value of shares traded yesterday was NT$98.3 billion (US$2.8 billion), down from a seven-month high yesterday of NT$125.3 billion.
Chunghwa Telecom fell NT$1.30, or 2.8 percent, to NT$45.50. The nation's biggest phone company said it will cut international mobile-call rates to China, Canada and the US, a move which could hurt sales and earnings amid a shrinking economy. The economy contracted 4.21 percent in the third quarter, after shrinking 2.35 percent in the second. Many economists expect GDP to fall this year.
Other stocks whose business is primarily in Taiwan also fell. Cathay Life Insurance Ltd (國泰人壽), the biggest life insurer in Taiwan, dropped NT$2.70, or 6.1 percent, to NT$41.50.
Formosa Group shares fell after the US Conference Board's consumer-confidence index unexpectedly fell to 82.2 this month -- the fifth consecutive monthly decline -- from a revised 85.3 in October. The November reading was the lowest since February 1994.
Formosa Plastics Corp (
Taiwan Semiconductor Man-ufacturing Co (
Meanwhile, Far Eastern Textile Ltd (
Far EasTone Telecommunications Co (
Polaris Securities Investment Trust Ltd (寶來證券投信) fell NT$0.35, or 2.6 percent, to NT$13.05. Prudential Plc, Britain's second-biggest insurer, may spend as much as NT$1.6 billion to buy closely held Polaris Securities Investment Trust, a Chinese-language newspaper reported, without citing sources. Polaris and Prudential wouldn't comment on the report.
Taiwan Cellular Corp (
Yageo Corp (國巨) fell NT$1.60, or 7 percent, to NT$21.40. Nomura Asia rates the stock "underperform" and expects the spot price of its multi-layered ceramic capacitors, which represent almost half of Yageo's sales, to drop another fifth after declining 35 percent from the third quarter of last year.
Yageo, whose parts control electricity flow into computers, is likely to see demand for computers decline again next year, further depressing earnings, Nomura said.
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