Taiwan stocks fall 1.29 percent on oil prices and techs tumble

Taiwan stocks fell over 1 percent on Monday as rising oil prices touched off profit-taking on memory chip and display screen makers after sharp gains that had been spurred by upbeat forecasts from heavyweight TSMC.
The benchmark TAIEX share index gave up 1.29 percent to end at 5,350.40, nearly erasing Friday's 1.33 percent rise as US light crude hit an all-time high in electronic dealing on the New York Mercantile Exchange.
"The key is oil prices," said Alvin Teng, assistant research manager at SinoPac Securities. "If prices continue to rise this week, people will become more pessimistic about the momentum of economic growth."
Electronics shares, which led the last session's rebound, were the heaviest decliners as oil prices rose after the United States raised its security alert to "high" for a possible al Qaeda attack on a top financial institution.
Powerchip Semiconductor, Taiwan's largest memory chip maker, was the most actively traded issue and tumbled the seven percent daily trading limit to T$22.50.
AU Optronics, the world's third largest display panel maker, lost 5.3 percent and was next on the active list. Both firms face volatile prices and are vulnerable to downturns if the high cost of oil causes the global economy to weaken.
Taiwan Semiconductor Manufacturing Co (TSMC), the world's largest contract microchip maker, fared better than most other tech plays after reporting strong quarterly results and optimistic forecasts last week, trimming just 0.23 percent.
Overall turnover was sluggish at just T$41.8 billion, down from an already lacklustre T$55.3 billion on Friday.
"Basically, I think the index will keep probing lower, though it will put up a little bit of a fight," Teng said, pointing to initial support from last week's nearly one-year intraday low at 5,280 points.
Construction shares managed to rise with real estate prices showing strong growth this year. Hung Sheng Construction was among the most heavily traded shares and added 1.27 percent to end at T$15.90.
The over-the-counter market's TAISDAQ index lost 2.62 percent, while August TAIEX futures fell 76 points, or 1.42 percent, to end squarely at the nearest line of technical support at 5,280.