Taiwan stocks fell 1.29 percent on Monday to their lowest close in four weeks, weighed down by big tech firms including TSMC that had forecast a weaker fourth quarter and after a brokerage warning hurt US chip shares.
The main TAIEX share index ended down 91.54 points at 6,995.20. Soft turnover of T$71.433 billion ($2.15 billion) reflected the cautious mood after a strong, Wall Street-inspired rally that started in mid-July.
The last time the TAIEX hit a point lower was on October 4. "It seems everybody is cautious on the fourth quarter now even though Christmas is coming soon," said Albert Lin, manager at Jih Sun Investment Consulting Co Citing higher inventories among its clients, both TSMC and key competitor United Microelectronics Corp (UMC) forecast fourth-quarter profit margins will fall from the third quarter.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world's top contract chip maker and a big supplier to US chip makers, shed 2.88 percent, pulling the bellwether electronics sub-index 1.33 percent lower. But Lin said the market's downside should be limited on hopes of buying by domestic fund managers, who want to boost performance of their portfolios before books close for the year.
The financial sector was off 1.26 percent even after a local newspaper reported that Sycamore Ventures, a venture capital firm, has set aside US $400 million to invest in Taiwan's financial industry.
Advanced Semiconductor Engineering Inc (ASE), the world's biggest microchip packaging firm, rose 0.33 percent before it releases third-quarter profit and gives guidance for the fourth quarter later in the day. But Asustek Computer Inc, the market's most actively issue by turnover, advanced 1.1 percent after a report that the firm had received an order to make notebook computers for Japan's Toshiba Corp.