Taiwan stocks at two-month low; banks tumble

Taiwan stocks fell 1.45 percent to end at a 2-month low on Tuesday as banking shares touched off broad losses following a report that bids for Chang Hwa Bank's overseas share offer were well below market prices. The TAIEX share index lost 87.50 points to finish at 5,961.24, breaching the psychologically important 6,000 point mark for its weakest close since January 28.
"Chang Hwa was a factor, but the index needed a correction," said Roger Lin, deputy research manager at SinoPac Securities. "It is clear that banking share led the fall but this is an across-the-board correction."
Chang Hwa Commercial Bank Ltd, Taiwan's sixth largest bank, was the most actively traded issue, tumbling 3.99 percent to T$18.05 on a report in the Economic Daily News that bids for the bank's global depository receipts were as low as T$9.0.
Lin said the market had also not fully priced in first-quarter earnings surprises from a strong Taiwan dollar and new rules that require assets and investment to be revalued at market prices.
The banking and financial sub-index ended 1.38 percent lower to a near seven-month low, while selling caught up with the electronics sub-index, ending off 1.63 percent.
Domestic fund managers cashed out of their favourite handheld electronics plays, with Wintek, a maker of small-sized display screens, tumbling 5.64 percent to T$43.50 in heavy turnover of 122.76 million shares.
Market turnover was lacklustre at T$62.0 billion, though that was up from T$55.24 billion in Monday's session.
Traders said market bulls tried to prop up sentiment by bidding up tech heavyweight AU Optronics, which ended with a 0.23 percent gain, but a gloomy atmosphere prevailed.
Optical disc maker CMC Magnetics highlighted earnings worries, saying it would post a fourth-quarter pretax loss of below T$3.9 billion due to the new accounting regulations, and remain in the red during the first quarter.
CMC shares ended with a loss of 3.17 percent to T$13.75.
The over-the-counter market's TAISDAQ index dropped 2.55 points, or 2.10 percent, to end at 188.79, while April TAIEX futures fell 1.34 percent to close at 5,973.