Taiwan stocks slid 2.94 percent on Monday to their lowest close in nearly 6 months, as a Wall Street tumble triggered strong stop-loss selling across the board on worries over demand for electronics. The main TAIEX fell as much as 3.5 percent before ending down 173.21 points at 5,715.16, marking its largest daily percentage drop since a 3.12 percent slump on November 22 last year, when US stocks slumped due to rising interest rates.
"In addition to the poor performance on Wall Street, people are very cautious as earnings season looms," said Chiang Chen-sheng, manager at MasterLink Investment Advisory.
Display screen maker AU Optronics Corp, the market's most active issue, lost 4.49 percent to T$46.80 and Powerchip, a maker of memory chips, was off 3.39 percent at T$24.25.
Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chipmaker and the market's most heavily weighted stock, shed 1.95 percent to T$50.30 after its ADRs fell 1.56 percent on Friday.
The day's slump extended a 2.3 percent drop last week, when investors retreated to the sidelines before Taiwan and US firms report quarterly earnings.
All sectors lost ground, with the bellwether electronics sub-index falling 3.02 percent and the financial sector, second only to techs in weighting, ending down 3.29 percent. Other stock markets across Asia also slumped as disappointing earnings results from IBM raised concerns about the economy. Taiwan was one of the worst performers in Asia after Japan, whose Nikkei was down 3.55 percent.
The US Nasdaq shed 2 percent and the Philadelphia semiconductor index slid 3.3 percent on Friday.
Investors also avoided cyclicals, such as steel and paper shares. For example, China Steel, the island's largest steel producer, gave up 4.17 percent to T$32.20 as cooling measures in mainland China add to worries about slowing demand.
But Mitac International, a maker of personal computers, smartphones and PDAs, defied the decline after the firm posted last week a more than doubling in unaudited first-quarter pretax profit.
Mitac shares finished up 2.31 percent to T$26.60.
Turnover on the main exchange remained soft at T$72.66 billion as investors were still fretting that new regulations requiring companies to re-evaluate assets at market value will lead to write-downs and weaker first quarter profits.
Taiwan's listed firms will report earnings by end April.
The over-the-counter market's TAISDAQ index fell 3.34 percent to 116.10, while April TAIEX index futures shed 3.14 percent to 5,707.
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