Taiwan stocks ended 1.35 percent lower on Wednesday as investors took advantage of early gains inspired by a US rally to cash out of heavyweights that had led the market to a nearly 14-month high, like UMC. The TAIEX share index lost 85.19 points to close at 6,231.65, giving back early gains of nearly 1 percent, with investors growing skittish as it approached Thursday's peak of 6,401.81, the highest since late April 2004.
"After such a sharp advance, it's reasonable to pull back and consolidate for a while," said Alvin Teng, assistant research manager at SinoPac Securities. "The extent of the correction will depend on US markets and crude oil prices."
United Microelectronics Corp (UMC), which has risen around 30 percent since late April, surrendered early gains of 1.7 percent to close with a loss of 1.71 percent at T$23.00 and was the day's most actively traded issue.
Its larger competitor in the contract chip making business, Taiwan Semiconductor Manufacturing Co, fell T$1.50, or 2.66 percent, to T$54.90 and was next in line on the active list. Smaller electronics plays maintained their gains as bullish investors opted to hunt for value instead of chasing momentum. Opto Tech, a maker of light-emitting diodes (LEDs), jumped 6.58 percent to T$10.20.
Market turnover swelled to T$91.07 billion in the day's volatile session from T$62.1 billion on Tuesday. The financial sector, which had been largely left behind in the tech-driven rally of recent weeks, also showed signs of life.
Taiwan Business Bank, a small institution seen as a potential take-over target for one of Taiwan's big financial holding companies, was unchanged at T$10.50 but was also the morning's third most heavily traded stock. The over-the-counter market's TAISDAQ index fell 0.81 percent to 123.05, while July TAIEX index futures gave up 85 points, or 1.35 percent, to finish at 6,199.
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