Taiwan stocks fell 2.5 percent to a more than two-month closing low on Tuesday, as investors shunned major tech exporters such as TSMC on worries over high oil prices and slowing demand from the United States.
Taiwan's main TAIEX closed down 217.96 points at 8,370.00, with smartphone maker High Tech Computer diving 6.9 percent to its daily limit on fears of rising competition after rival Apple unveiled a new-generation iPhone.
The index's fall extended Monday's 1.8 percent drop to put the market on its lowest footing since March 20. Soft turnover of T$117.21 billion ($3.87 billion) demonstrated the cautious sentiment as investors worried rising inflation would hurt consumption.
"Foreign investors were selling index heavyweights as they're not sure about how strong the demand for electronics products will be," said Yuanta Securities analyst Kevin Chang.
Shares of Taiwan Semiconductor Manufacturing Co Ltd (TSMC) lost 2.1 percent and shares of United Microelectronics Corp (UMC) fell 1.4 percent, while the broader electronics sub-index slid 2.4 percent. TSMC, the world's biggest contract chip maker, reported a 15.5 percent annual rise in May sales as the Taipei market closed.
Both TSMC and UMC, which together take up about two-thirds of the global foundry market, sell the bulk of their products to clients in the United States. However, data on Monday showed Taiwan's annual exports growth in May accelerated to 20.5 percent as strong demand from emerging Asia offset slower shipments to the United States. Taiwan Cooperative Bank fell 2.6 percent after a local newspaper report that it plans to spend T$3.2 billion ($106 million) to build its headquarters in Taipei, with construction expected to be completed in three to five years. The financial sector fell 3.1 percent.
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