stock / 32.597/1078 / -11.5

14:11 04Jun09 RTRS-Taiwan stocks post biggest daily drop in 3 wks * Market hits near two-week low after weak U.S. economic data * TSMC leads technology shares lower * Chunghwa Telecom up after report of undersea cable project * WPG Holdings falls despite target to double sales revenue (Adds details and quotes) By Gina Chang TAIPEI, June 4 (Reuters) - Taiwan stocks fell 1.55 percent on Thursday, their biggest daily percentage drop in nearly three weeks, as dismal U.S. economic data dampened hopes for an economic recovery and dented tech shares including TSMC <2330.tw>. The main TAIEX share index <.TWII> finished 107.08 points lower at 6,786.06, its weakest finish since May 26 and the worst single-day percentage drop since May 14. Turnover was moderate at T$159 billion ($4.9 billion), slightly higher than T$156 billion on Wednesday. "The market was starting to stage a significant pullback. People who didn't sell stocks in the last few days are locking in profits," said Tu Jin-lung, chairman of Grand Cathay Investment Services. The TAIEX, which has gained 48 percent so far this year, had been losing steam after breaching the psychologically important 7,000-point level to nine-month closing highs earlier this week. "The market will take a breather in June after rallying for four months," said Tu, adding that the TAIEX could drop to as low as 6,250 points in the short term. Taiwan Semiconductor Manufacturing Co (TSMC), the world's top contract chip maker, lost 3.2 percent, tracking a 4.6 percent slide of its ADRs in New York trading overnight. Hon Hai Precision <2317.tw>, Taiwan's top electronics parts maker, shed 4.4 percent, pulling down the electronics sub-index <.TELI> by 1.56 percent. Investors were cautious before Taiwan companies release May sales figures by June 10, analysts said. Many technology companies are expected to post weaker results from a month before, partly due to forex losses caused by recent rises in the local currency, analysts said. China will invest 1 trillion yuan ($147 billion) to set up 3G cellular networks over the next three years, and will purchase up to 300 million mobile phone handsets, creating potential business opportunities for Taiwan's chip makers and handset manufacturers, local media reported on Thursday. VIA Technologies Inc <2388.tw>, the island's top designer of PC processors, jumped 6.63 percent, but smartphone maker HTC Corp <2498.tw> was down 4.17 percent. Investors also ignored an upbeat outlook for laptop PCs by Intel Corp . [ID:nTP271442] Shares of Acer Inc <2353.tw>, the world's No.3 PC brand, gave up early gains to drop 3.7 percent and rival Asustek <2357.tw> slid 2.5 percent. "These PC shares have risen a lot. Besides, the economy is still bad. At times like this, people will not want to replace their old computers with new ones," said Cathay's Tu. Another big loser was the financial sub-index <.TFNI>, which slipped 2.26 percent following a 40 percent rise so far this year. Cathay Financial <2882.tw>, the island's biggest listed financial holding firm, shed 3 percent. HOT STOCKS -- Chunghwa Telecom <2412.tw>, Taiwan's top telecom service operator, rose 0.79 percent. The company and China Telecom <0728.hk> would build an undersea cable linking Taiwan's Kinmen island to the Chinese city of Xiamen, the first direct undersea cable linking the two sides, local media reported. -- Electronic parts distributor WPG Holdings <3702.tw> ended down 1.5 percent, giving up a more than 1 percent gain early in the session after a company executive told Reuters it aimed to double sales revenue and increase its headcount in coming years. [ID:nTP260531] -- Powerchip <5346.two>, Taiwan's largest DRAM maker, ended limit-up after its May sales rose 42.7 percent from a month earlier. [ID:nTP226989] --------------------TAIEX IN PERSPECTIVE-------------------- Move on day -1.55 percent Close on day 6,786.06 2009 intraday high 7,084.83 2009 intraday low 4,164.19 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$32.6) ((gina.chang@thomsonreuters.com; editing by Ken Wills; +886 2 2508-0815; Reuters Messaging:gina.chang.thomsonreuters.com@reuters.com)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) ASIA-PACIFIC STOCK MARKETS: Pan-Asia......[STXNEWS/AS] Japan........[.T] S.Korea....[.KS] S.E. 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