* Stocks at fresh 5-yr low as rule halving fall limit ends
* Tech issues hit by demand fears
* China Airlines climbs as oil prices slip
(Adds details, quotes)
TAIPEI, Oct 27 (Reuters) - Taiwan stocks tumbled 4.65 percent
to a fresh five-year closing low on Monday, after the government
ended a rule that halved the daily downside limit, playing
catch-up with last week's losses in other global markets.
A bleak outlook for technology demand drove investors away
from big exporters, including TSMC <2330.TW>. The main TAIEX
share index <.TWII> closed 212.75 points lower at 4,366.87,
paring earlier losses of over 6 percent at the opening bell.
Turnover was light at T$35.865 billion ($1.07 billion), but
higher than Friday's T$25.7 billion. Investors cautiously awaited
more quarterly earnings from major technology companies.
"I think we are looking at a bottom of about 4,100 by the end
of this week, which is about right when you look at the kind of
falls that we have seen in other markets," said Kevin Yang,
president of Paradigm Asset Managment.
Taiwan's government, which had come under fierce criticism
for halving the downside limit, announced on Sunday it would
resume the 7-percent downward cap on individual stocks to boost
market liquidity [ID: nTP344530].
Some analysts also expect the government's National
Development Fund to enter the market, shoring up prices in a bid
to boost investor confidence.
"TSMC would obviously be one of their targets. We're seeing
valuations that are extremely low for the company, at levels that
are historically not seen," said Rick Hsu at Nomura Securities.
Nonetheless, the tech heavyweight, the world's top contract
chip maker, slid 3.65 percent. The company is set to release its
third-quarter earnings on Thursday.
All of the TAIEX's main sub-indexes that measure performance
by industry declined, with many of the island's blue chips
joining in the freefall.
Taiwan's top electronic parts maker Hon Hai <2317.TW> fell by
its daily maximum limit less than hour into trading and stayed
there for the rest of the trading day. The stock closed at a
41-month low on Monday.
This is the sixth consecutive day it has gone limit down and
is ahead of its third-quarter results announcement, which it must
release by the end of the week.
Fears of slowing consumer demand for products sold by
downstream tech companies heading into the critical holiday
season also caused investors to flee that sector.
PC makers Acer <2353.TW> and Asustek <2357.TW>, and
smartphone maker and vendor HTC Corp <2498.TW> were all limit
down at the close of the day's session.
The Taiwan dollar
three years on Monday amid weak investor sentiment, hitting an
intraday low of T$33.519 to the U.S. dollar as investors staked
out safer havens such as the U.S. dollar.
HOT STOCKS
-- Financial shares also slid, with Cathay Financial
<2882.TW> and Fubon Financial <2881.TW> both going limit down
about two hours after the opening bell. The two shares remained
there until the market closed.
"We will probably have to wait for some guidance from their
Q3 results before there is any significant change in direction
for these shares," Celia Wu of Yuanta Securities said.
-- Bucking the trend was China Airlines <2610.TW>, which
closed up 5.85 percent as an OPEC production cut failed to pull
up oil prices.
"China Airlines hit a low on Oct. 13 and its share price has
been rising since then. It looks like foreign investors are
pushing up the share price there," said Nigel Lee of the National
Investment Trust.
--------------------TAIEX IN PERSPECTIVE--------------------
Move on day -4.65 percent
Close on day 4,366.87
2008 intraday high 9,309.95
2008 intraday low 4,301.33
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
For a table of foreign trading in Taiwan stocks, double-click
on [ID:nTP170358]
(Reporting by Kelvin Soh, Editing by Jonathan Hopfner)
((kelvin.soh@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging:kelvin.soh.reuters.com@reuters.net))
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Monday, 27 October 2008 14:28:04RTRS [nTP126402] {EN}ENDS
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