Taiwan stocks fall as China data weighs: techs slip
Taiwan stocks fell 1 percent today, joining other regional bourses in starting the quarter on a negative note, with a slowdown in China's manufacturing growth and lack of risk appetite dampening sentiment.Updated: Jul 01, 2010 12:35 IST
Taiwan stocks fell 1 percent on Thursday, joining other regional bourses in starting the quarter on a negative note, with a slowdown in China's manufacturing growth and lack of risk appetite dampening sentiment.
Ceramics and plastics firms led the declines, while tech shares slipped on demand concerns, with chip designer Mediatek <2454.TW> falling 4.5 percent after brokerage reports flagged tough times ahead. Transport stocks gained however, offering some support.
The pace of Chinese manufacturing activity slowed in June to the lowest since February, while HSBC's separate purchasing managers' index fell to a 14-month low.Concerns over Europe's financial strength also hastened a flight from risk.
"In Europe, the sovereign debt problems have got more severe. You can see China may have problems, but that's nothing compared to what's happening in Europe," said Alvin Teng, assistant research manager at SinoPac Securities.
The TAIEX index <.TWII> fell 75.31 points to 7,254.06, its lowest close in three weeks.
It had fallen 1.3 percent on Wednesday, ending the second quarter down 7.5 percent. That came on top of a 3.3 percent fall in the first quarter.
Major exporter Taiwan Glass <1802.TW> fell 4.2 percent, pulling the ceramics sub-index <.TGLI> down 3.4 percent, while the plastics sub-index <.TPLI> fell 1.9 percent, dragged down by a 2.7 percent fall in Formosa Plastics <1301.TW>.
Among tech shares, LCD panel maker AU Optronics <2409.TW> fell 1.4 percent, chip maker UMC <2303.TW> fell 2 percent and Asustek <2357.TW>, which has enjoyed a strong run after restructuring last month, fell the daily limit 6.9 percent.
"We are concerned that tech companies' sales in the third quarter won't be as good as we had expected earlier this year if demand slows in the coming months," said Alex Huang, analyst at Mega International Securities.
He did not rule out the TAIEX dropping below 7,000 points in the third quarter.
Transport stocks were one of the few bright spots. Evergreen Marine <2603.TW> jumped 6.8 percent after a newspaper report that it would add a surcharge to European routes from this month in part to counter the effects of the weak euro. The sub-index <.TTPI> rose 2.8 percent.
Foreign investors were net sellers of Taiwan stocks in June, unloading some T$12.4 billion ($384.3 million) in the month. For the second quarter, they sold a net T$23.2 billion, compared with net buying of T$26.9 billion in the first quarter.