twn stock 0302

13:58 02Mar09 -Financial shares push Taiwan stocks to 3-week low
* Market hits more than 3-wk closing low on financial issues
* TSMC gives up gains ahead of an announcement with Intel
* DRAM shares mixed after a Micron report

(Adds details and quote)
TAIPEI, March 2 (Reuters) - Taiwan stocks finished 2.88
percent lower on Monday at a more than three-week closing low, as
investor concerns over the ailing U.S. banking sector hurt
financial shares such as Cathay Financial <2882.TW>.
The main TAIEX share index <.TWII> ended down 131.32 points
at 4,425.83, its weakest close since Feb. 5. Turnover was light
at T$75.5 billion ($2.1 billion), but higher than T$68.8 billion
in the previous session.
The financial sub-index <.TFNI> shed 6.31 percent, ending at
a record closing low of 462.34.
"Financial shares were dragged down by losses in U.S. banking
stocks," said Tu Jin-lung, chairman of Grand Cathay Investment
Services.
"Foreign investors have been pessimistic about the outlook
for financial companies. That also pressured their shares today,"
said Tu, who expected the market to trade between 4,371-4,564
points this week.
Last week, JPMorgan downgraded its rating on Cathay
Financial, the island's top listed financial holding firm, and
cut its target price on the firm to T$18 from T$30.
[ID:nSEO207897]
Shares of Cathay dropped by their 7 percent limit to T$26.10,
while Fubon Financial <2881.TW>, Taiwan's No. 2 insurer, also
closed limit down.
Adding gloom to financial stocks, a local newspaper cited a
rating agency report on Monday that the non-performing loan (NPL)
ratios of Taiwan's banks could double to 3 percent in 2009 from
last year due to the deepening global recession.
Shares of Taiwan Semiconductor Manufacturing Co (TSMC), the
world's top contract chipmaker and the most active share by
turnover, closed 0.44 percent lower, surrendering early gains due
to the broader market's weakness.
TSMC and Intel will make a "strategic announcement"
on Monday, driving market and media speculation that TSMC might
begin to outsource crucial manufacturing. [ID:nN27380474]
In the DRAM sector, Powerchip <5346.TWO> and Nanya Tech
<2408.TW>, Taiwan's two largest DRAM makers, lost 5.3 percent and
6.4 percent, respectively. Shares of ProMOS <5387.TWO> ended
flat.
U.S. memory chipmaker Micron had offered funds and
unconditional technology transfers for Taiwan's struggling DRAM
sector, a local newspaper reported on Saturday.

HOT STOCKS
-- Hon Hai Precision Industry <2317.TW>, Taiwan's top
electronics gear maker, fell 2.58 percent, pressured by a broader
sell-off and ignoring a newspaper report saying the firm has
started to make low-cost netbook PCs for Chinese firms on a
contract manufacturing basis to tap the huge China market.

--------------------TAIEX IN PERSPECTIVE--------------------
Move on day -2.88 percent
Close on day 4,425.83
2009 intraday high 4,817.44
2009 intraday low 4,164.19
All time high 12,682.41 12 FEB 1990
------------------------------------------------------------
(US$1=T$35.2)
(Reporting by Gina Chang, Editing by Jacqueline Wong)
((gina.chang@thomsonreuters.com; +886 2 2508-0815; Reuters
Messaging:gina.chang.thomsonreuters.come@reuters.com))
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