Taiwan stocks dip

Taiwan stocks fell 0.7 percent on Wednesday, their worst daily percentage drop in one week, with export-reliant tech shares such as TSMC sinking on worries over slowing demand from China and the United States. The main TAIEX share index closed 47.08 points lower at 6,668.14.
Softer turnover of T$116 billion ($3.5 billion) showed that investors fretted the local market could pull back further following months of rallies. "Taiwan stocks tracked losses in both the US and China stock markets today, with export-reliant technology shares being hit the hardest," said Kevin Chung, an analyst at Jih Sun Investment Consulting Co.
The stock market will be trapped in a tight range between 6,500-6,700 points in the short term, as foreign investors are reluctant to trade because of a volatile local dollar, Chung said. Shares of TSMC, the world's top contract chip maker, dropped 1.81 percent, dragging the broader semiconductor sub-index down 0.31 percent, while its smaller rival United Microelectronics Corp, (UMC) rose 4.48 percent.
TSMC and UMC, which together take up about two-thirds of the global chip foundry market, sell the bulk of their products to clients in the United States. The two companies are set to report June sales later this week. Quanta, the world's largest contract laptop PC maker, dropped 0.85 percent, pulling the broader computer and peripherals sub-index 0.49 percent lower.
The optoelectronics sector rose 0.67 percent, outperforming the broader electronics sub-index, which edged down 0.13 percent, and the main board. AU Optronics rose 0.88 percent on news that Taiwan's government would soon launch a programme that encourages the use of electronic reading devices, or e-books, which require a new generation of flexible displays.
Asset-related shares dropped on a weaker Taiwan dollar, with Taiwan Fertiliser dropping 0.93 percent. The banking and insurance sub-index fell 1.12 percent, with China Development Financial falling more than 2 percent after it sold its 20 percent stake in the Taipei 101 skyscraper to Ting Hsin International Group. Taiwan's Evergreen Marine, the world's fourth-largest container line, fell 3.37 percent after it said on Wednesday that it would dismantle a sixth of its fleet over the next four years as it sees no clear signs of an economic recovery.