Taiwan stocks fell 3.22 percent on Tuesday to a near one-month closing low, with technology shares including HTC Corp leading the decline after reporting weaker-than-expected May sales. The main TAIEX share index closed 213.63 points lower at 6,414.39, its weakest finish since May 14 and bringing its losses to 6 percent over the past two sessions.
Turnover was moderate at T$159 billion ($4.8 billion), rising from T$147 billion recorded on Monday. Smartphone maker HTC fell 5 percent, underperforming a 3 percent fall of the electronics sub-index. "Many companies' sales came worse than expectations, which pressured the market to pull-back from the recent rally," said Eddy Chen, a vice president at National Investment Trust Co.
The TAIEX has gained 51 percent since hitting the year's trough in late January. However, HTC's CEO said he is still confident of reaching the company's second-quarter sales target of T$37.5 billion to T$38.5 billion even after its May sales fell short of analysts' expectations, a local newspaper reported on Tuesday.
Local companies are required to report May sales by June 10. The TAIEX could trade as low as 6,300 points in the near term, analysts said, but some optimists said the TAIEX could still resume momentum to test 7,000 points as the world economy gradually recovers. United Microelectronics Corp (UMC), the world's second-largest contract chip maker, shed 5 percent ahead of its May sales announcement.
UMC's larger rival Taiwan Semiconductor Manufacturing Co (TSMC) changed course to close down 0.88 percent ahead of its May sales report on Wednesday. AU Optronics and Chi Mei Optoelectronics, Taiwan's two largest LCD makers, fell 0.85 percent and 5.7 percent, respectively, paring early gains after May sales at both companies rose nearly 14 percent from a month before.
Wistron Corp, Taiwan's No 3 contract laptop maker, dropped 3.96 percent after a source said on Tuesday the firm plans to raise about $225 million through a follow-on placement of new shares. The transportation sub-index slid 4.8 percent after the Baltic Dry Index (BDI), which tracks the costs of shipping key commodities, fell for a third session on Monday.
The financial sub-index, which gained 65 percent since hitting a low early in March, slipped 4.6 percent. Cathay Financial, Taiwan's top listed financial holding firm and Chinatrust Financial, the island's largest credit card issuer, dropped 5 percent and 6.8 percent, respectively.