Taiwan stocks ended with broad losses on Monday as Beijing's plans for legislation aimed against Taiwan secession hit China-related shares like China Motor and China Airlines. The TAIEX share index lost 0.39 percent to close at 5,985.94, dropping for the second session in a row after hitting a nearly one-month closing high on Thursday.
China plays were heavy decliners after China's official Xinhua news agency said on Friday Beijing would introduce an anti-secession law, which Taipei condemned as a move to establish a legal basis to attack self-governing Taiwan.
China Motor, which owns a fast-growing automobile joint venture in the southern province of Fujian, lost 0.78 percent to close at T$38.00. That was up from intraday losses of 2.35 percent, however.
"The main factor has been from the anti-secession law," said Roger Lin, deputy research manager at Pacific Securities. "The actual impact has been light, though."
"It looks as if domestic institutions are not very aggressively buying on the lows. TFT-LCD shares have failed to keep attacking higher," Lin said.
Makers of thin-film transistor liquid crystal displays (TFT LCD) took heavy losses after Taiwan's third largest player, Chunghwa Picture Tube cut its 2004 pretax profit forecast by nearly a third on Friday.
Chunghwa tumbled 3.15 percent in heavy trade, while AU Optronics, the world's third largest maker of LCD panels, fell 1.75 percent to close at T$44.80.
Market turnover was sluggish at T$56.7 billion declining slightly from T$60.21 billion in Friday's session.
Transport shares were dealt a double blow from a US $2.10 rise in NYMEX January crude futures as well as chilling relations between Taiwan and China, which darkens the already-dim prospects for talks on direct transportation links.
China Airlines, Taiwan's largest carrier, fell 3.23 percent to T$18.00, while top shipper Evergreen Marine gave up 2.52 percent to close at T$30.90.
The over-the-counter market's TAISDAQ index lost 1.08 percent to close at 112.04, while January TAIEX futures fell 57 points, or 0.95 percent, to close at 5,962.
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