Taiwan stock marketdown 1.7% on profit-taking, UMC warning

Sandra Chuang, The China Post

Taiwan’s stock market fell 88.11 points, or 1.7 percent, to close at 5,070.52 on a daily turnover of NT$31.4 billion. The market fell 26.11 points at the opening and continued to drop for the rest of the session as investors took their profit out of the market on concerns over the decline in U.S. stocks and United Microelectronics Corp.’s (UMC’s) warning last Friday. Dealers said the already fragile sentiment was further hurt by UMC’s profit warning that the company is expected to post an operating loss for the current quarter, and an even worse result for the third quarter. “The warning sparked fears that other companies might follow suit in the following quarters,” said a dealer.

UMC closed 4.8 percent lower to NT$50 today, while its counterpart Taiwan Semiconductor Manufacturing Co. shed NT$1.6 percent to NT$92. Technology shares were the worse performers by sector in response to the continued fall in the Nasdaq and the weak profit outlook for the industry. “In addition to the gloomy fundamentals, the increasing political uncertainty also added pressure to the market,” the dealer said. The report said that a further break-up of the Kuomintang had had a negative affect on investors. as many believed a macroeconomic recovery could be seen in the second half of the year, he added.

Financial shares generally moved downward on concern over a further rise in overdue loans. However, Chung Shing Bank bucked the market on the back of possible foreign investment, rising 6.6 percent to NT$1.45.