Taiwan stocks post biggest loss

Taiwan stocks ended 1.09 percent lower on Monday, posting their worst single-day drop in two weeks, led by tech heavyweights such as AU Optronics on concerns about their fourth-quarter outlook. The main TAIEX share index finished 80.19 points lower at 7,256.95, after posting a weekly gain of 2.56 percent last week to end at a 14-month high.
AU Optronics, the world's No 3 flat panel maker and the most actively traded stock by volume, shed 3.81 percent, sending the optoelectronics sub-index 2.28 percent lower. "AU Optronics could face oversupply as major Korean panel makers increase production," said John Chiu, a vice president at Fuh Hwa Securities Investment Trust.
"A surprise fall in August sales reported by several technology companies also raised a red flag about fourth-quarter demand in the technology sector." TSMC, the world's No 1 contract chip maker, fell 1.44 percent. It posted a decline in August sales last week.
However, Mediatek, the session's most active stock by turnover, rose 2 percent. Mediatek, Taiwan's top chip designer and supplier, rose amid optimism that the smartphone sector could see continued growth, helped by increasing demand from emerging markets such as China..
Banking shares ended 2.11 percent lower as investors locked in recent profits, ignoring a media report that a memorandum of understanding (MOU) on Taiwan and China opening their financial sectors to each other may be signed as early as October. "It's unlikely that financial shares will surge like they did last week, unless the governments of China and Taiwan take more concrete actions towards the financial MOU," Chiu said. Chinatrust Financial, Taiwan's top credit card issuer, slipped 2.2 percent.
Chunghwa Telecom edged up 0.35 percent after a local newspaper report said that it had signed an agreement with China Unicom to cut roaming charges by up to 50 percent when running on each other's networks. Tourism shares finished 0.41 percent higher, as the long holiday beginning October 1. in China is expected to warm up the island's tourism business, a local newspaper said.
Turnover was thin at T$94 billion ($2.88 billion), lower than last week's daily average of T$136 billion. "If turnover continues to be thin, the main index could hover at around 7,200 points" for the near future, said Andrew Deng, an assistant vice president at Taiwan International Securities Corp.