Taiwan stocks slip

Taiwan stocks changed course to end 0.76 percent lower on Tuesday, as fears that North Korea might launch more missiles as a long holiday weekend approaches, prompting investors to cash in gains in financial and technology shares. The main TAIEX share index had risen more than 1 percent in early trade but closed 51.35 points lower at 6,683.11, hurt by news that North Korea was reportedly ready to test-fire more short-range missiles.
Taiwan markets will be closed on Thursday and Friday for the Dragon Boat Festival and will re-open on Monday. Turnover was active at T$199.7 billion ($6.1 billion), slightly higher than Monday's T$190.7 billion. The banking and insurance sub-index fell 2.84 percent, weighed down by Cathay Financial, Taiwan's top listed financial holding firm, which lost 2.33 percent.
The index has gained 37 percent so far this year. "Investors were taking profits in shares that have risen a lot before the long holiday," said Robert Hsieh, a vice president of Shin Kong Investment Trust. "The market could pull-back further in the short term after the recent rally, but it still has a chance to resume the upward trend in the longer term as there's ample liquidity to help push up the market," Hsieh said.
The TAIEX has risen 46 percent so far this year, largely due to expectations that warmer ties with China could lure more money to invest in the island. The electronics sub-index declined 0.96 percent. Mediatek, Taiwan's largest chip designer and the day's most active share by turnover, dropped 1.5 percent. The construction sub-index slid 5 percent following a 54 percent jump so far this month, outperforming a 12 percent rise on the broader market.
The day's fall came despite local media reporting Taiwan's central bank, hoping to prevent currency speculation, had urged foreign investors who have recently put money in the island's currency markets to buy local stocks.
The computer and peripherals sub-index fell 1 percent, but PC vendors Acer and Asustek rose 1 percent and 0.22 percent, respectively, after both firms were included in a Chinese stimulus package. Laptop casing maker Ju Teng ended 7 percent limit-up for a second consecutive session after its trading debut in Taiwan on Monday.
Chung Hung Steel rose 3 percent after a local newspaper said the firm has decided to raise its steel prices for June by an average of 4.5 percent to 5.5 percent, its first rise in nearly 10 months, showing the steel market was bottoming out. The steel and iron sub-index gained 2.85 percent.