Taiwan stocks ended down 0.71 percent on Tuesday, as investors used losses on Wall Street as an excuse to sell tech counters, such as UMC and ASE. After reaching a 6-year high on Monday, the main TAIEX declined 53.21 points to 7,444.94. The electronics sub-index fell 1.1 percent and the bank and insurance sector lost 0.32 percent.
Turnover was active at T$113.48 billion (US $3.47 billion), but slightly lower than T$128.52 billion in the previous session. "The drop of US stocks overnight sent the market into a temporary correction, but the index should still end at around 7,500 to 7,550 at the week's end because investors are still buying on the market," said Michael On, director at Beyond Asset Management.
Most Taiwan tech firms export electronics components or assemble computers and mobile phones for large US vendors. Advanced Semiconductor Engineering Inc (ASE), the world's top microchip packaging firm, had fallen 0.66 percent to T$37.70 by the close after going limit-up on Monday. The stock had been on the rise earlier in Tuesday's session. Its US-traded ADRs surged after the Carlyle deal was announced last week, but then fell 2.5 percent in Monday trading in New York.
Carlyle's buyout bid has raised concerns for the Taiwan government as more foreign equity players could target big local firms leading to some major companies possibly de-listing from the stock market, analysts said.
Blue chip stock Taiwan Semiconductor Manufacturing Co Ltd (TSMC), lost 0.93 percent, while smaller rival United Microelectronics Corp (UMC) dipped 2.59 percent after rising the daily 7 percent limit on Monday.
While techs weakened, investors switched funds to small-cap growth issues. Wei-Chuan Foods rose the daily 7 percent maximum, leading the food index 3.22 percent higher. Hsinchu International Bank fell 0.43 percent after the Commercial Times reported on Tuesday that it is planning to delist from the market next February, following a successful tender offer from Standard Chartered.