* Market ignores rate cut as US auto industry bailout stalls
* Tourism issues rally before China-Taiwan deals
* Acer down even after upbeat outlook
(Refiles to add dropped words in first bullet point)
(Adds details and quotes)
By Gina Chang
TAIPEI, Dec 12 (Reuters) - Taiwan stocks posted their biggest
slide in three weeks on Friday, led by a sell-off in heavyweights
such as TSMC <2330.TW> and Cathay Financial <2882.TW> after a
bailout package for the U.S. auto sector stalled in the Senate.
The main TAIEX share index <.TWII> closed down 3.74 percent,
or 174.30 points, at 4,481.27, despite Taiwan's central bank
making its biggest interest rate cut in 26 years on Thursday.
Today's drop was the steepest since Nov 20, when the index
closed 4.53 percent lower, and capped this week's gain to 6
percent.
Among the biggest losers were the electronics sub-index
<.TELI> and financial sub-index <.TFNI>, which slumped 4.54
percent and 5.66 percent, respectively.
Turnover was T$90.2 billion ($2.7 billion), down from T$95.9
billion a day earlier.
"Shares dropped rapidly as disappointed investors dumped
stocks after news the U.S. auto bailout failed," said Alex Huang,
vice president of Mega International Securities.
Huang expected the market to trade between 4,300-4,700 points
next week.
Tracking losses in other Asian peers, the Taiwan market
slumped around midday after the U.S. Senate failed to reach a
last-ditch compromise to bail out automakers, effectively killing
any chance of congressional action this year. [ID:nN09294627]
"The failure of the bailout came as a big disappointment for
Asian investors. It means the U.S. economy and unemployment will
deteriorate, hurting the global economy further," said John Chiu,
vice president of Fuh Hwa Securities Investment Trust.
Taiwan Semiconductor Manufacturing Co (TSMC)
world's top contract chip maker, dropped by its daily 7 percent
limit.
AU Optronics <2409.TW>, the world's No.3 flat panel maker,
fell 1.28 percent after it said on Thursday it would delay
construction of its advanced LCD plants by at least six months.
[ID:nTP71663]
Cathay Financial - Taiwan's top listed financial holding firm
- and Chinatrust Financial <2891.TW> - the island's top credit
card issuer - both dropped more than 5 percent.
An interest rate cut of 75 basis points by the central bank
on Thursday failed to boost sentiment, as some investors
interpreted the move as an ominous sign for the island's economy.
[ID:nSP378689]
"The interest rate cut was wider than expected and it implied
that the downturn is more serious than we presumed," said Bevan
Yeh, a senior fund manager of Prudential Financial Securities
Investment Trust.
But a bright spot was the tourism sub-index <.THOI>, the
day's top winner with a 3.65 percent jump.
The rally came before landmark trade and direct flight links
between Taiwan and China come into force on Monday, spurring
hopes of more Chinese tourists to the island. [ID:nTP338594]
Formosa Regent <2707.TW>, a major hotel chain operator,
gained 6.29 percent and Ambassador Hotel <2704.TW> was up 3.13
percent.
HOT STOCKS
-- Acer <2353.TW>, the world's No.3 PC vendor, declined 4.44
percent.
The company, which has not publicly disclosed any profit
forecasts in the past, said on Thursday it may beat its initial
fourth-quarter estimates after reporting a 15 percent rise in
November sales versus a year ago. [ID:nSP374692]
-- DRAM makers also lost ground, with Powerchip <5346.TWO>
ending limit down and Nanya Technology <2408.TW> slipping 5.7
percent.
Powerchip's fall came after the company said it was studying
a plan to ask the government to buy a stake in Rexchip, its chip
joint venture with Japan's Elpida Memory <6665.T>. [ID:nTP120777]
--------------------TAIEX IN PERSPECTIVE--------------------
Move on day -3.74 percent
Close on day 4,481.27
2008 intraday high 9,309.95
2008 intraday low 3,955.43
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
For a table of foreign trading in Taiwan stocks, double-click
on [ID:nTP170358]
(US$1=T$33.3)
(Reporting by Gina Chang; Editing by Jonathan Hopfner)
((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging: gina.chang.thomsonreuters.com@reuters.net))
ASIA-PACIFIC STOCK MARKETS:
Pan-Asia......[STXNEWS/AS] Japan........[.T] S.Korea....[.KS]
S.E. Asia............[.SO] Hong Kong...[.HK] Taiwan.....[.TW]
Australia/NZ.........[.AX] India.......[.BO] China......[.SS]
OTHER MARKETS:
Wall Street...........[.N] Gold.........[GOL/] Currency..[FRX/]
Eurostocks...........[.EU] Oil...........[O/R] JP bonds...[JP/]
ADR Report..........[ADR/] LME metals..[MET/L] US bonds...[US/]
Stocks News US...[STXNEWS/US] Stocks News Europe...[STXNEWS/EU]
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Eurostocks Week Ahead [.EU/O] World forecasts
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