Taiwan stocks fell 0.78 percent on Monday, edging away from a two-month closing high, as losses on Wall Street and fears over a parts shortage hurt technology shares including Acer. Analysts say both retail and foreign investors were waiting for US stocks to stabilise or until signs of stronger technology demand emerge in the coming months.
"Investors are turning cautious now after recent gains, and you can see many blue chip technology shares are weakening," said Andrew Deng, analyst at Taiwan International Securities. Among major losers, PC vendor Acer lost 0.9 percent and Compal, the world's No 2 contract laptop PC maker, fell 2 percent amid lingering worries over the impact from a parts shortage on their sales and profit margins.
Top contract chipmaker TSMC fell 1.67 percent and smaller rival UMC was down 1.18 percent. Their losses pulled the main TAIEX index down 61.93 points to close at 7,835.98 amid renewed worries over Greece's debt problems that dragged US shares lower late last week.
Turnover fell to T$105 billion ($3.3 billion) from Friday's T$114.2 billion. The broader electronics sub-index slid 0.96 percent and the financial sector dropped 0.94 percent. LCD maker AU Optronics edged down 0.14 percent to T$36.75 despite a newspaper report saying that Morgan Stanley gave the stock a target price of T$46 on hopes of more new products.
"Sentiment on blue chip shares was poor but buying switched to some smaller growth stocks," said Tom Tang, a vice president at Masterlink Investment Advisory. Tang pegged the TAIEX at between 7,800-8,000 points this week. Epistar, which supplies LED chips for mobile phones, shot up 2.4 percent and LCD TV maker Amtran Technology rose 1.8 percent. Foreign investors were net sellers in February, but had bought T$91.7 billion worth of Taiwan shares this month as of Friday.
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