Taiwan stocks fall for 2nd day in a row

Taiwan's stocks fell for a second day. Hon Hai Precision Industry Co. paced declines among exporters after the largest drop in U.S. manufacturing in five years heightened concerns the world's biggest economy will enter a recession.

"The U.S. economy is worrisome and the latest economic indicator is pointing to a contraction," said Vickie Hsieh, who helps oversee US$1.4 billion at President Investment Trust Corp. in Taipei. "U.S. consumer demand will not be able to support growth of Asian exporters."

Shares also fell as oil prices rose to US$100 a barrel for the first time, leaving consumers with less to spend on other goods and services.

Taiwan Semiconductor Manufacturing Co. slid after a Citigroup Inc. analyst cut his share-price forecast for the stock, citing slowdown in demand.

The TAIEX index lost 138.85, or 1.7 percent, to close at 8,184.20 in Taipei. The measure declined 2.2 percent Wednesday. About four stocks dropped for every one that gained. Futures due in January slid 1.7 percent to 8,143.

Hon Hai, the maker of iPods for Apple Inc., declined NT$7.5, or 3.9 percent, to NT$187. The stock's two-day 9.4 percent drop is its biggest in two weeks. AU Optronics Corp., the island's biggest maker of liquid-crystal displays, fell NT$2.5, or 4.1 percent, to NT$58.3. Quanta Computer Inc., which makes notebook computers for clients such as Dell Inc., slipped 65 cents, or 1.4 percent, to NT$44.4.

The Institute for Supply Management's U.S. manufacturing index fell to 47.7, the lowest since April 2003 and the first reading below 50 since last January. The report, combined with a rise in the price of oil to a record US$100 a barrel, spurred concern that the global economy will slow down. The U.S. is Taiwan's largest export market after China.

Taiwan Semiconductor, the world's biggest supplier of made-to-order chips, declined NT$1.1, or 1.8 percent, to NT$59.40. Andrew Lu, an analyst at Citigroup, cut his share-price forecast for the stock to NT$66 from NT$71, citing seasonal slow demand. Lu reiterated a "hold" recommendation for the company, according to a research report dated today.

Elsewhere, Gintech Energy Corp., a maker of silicon solar cells, added NT$12, or 3.8 percent, to NT$330. Darryl Cheng, an analyst at Credit Suisse Group, initiated an "outperform" rating for the stock, according to a research report dated yesterday. Cheng has a share price forecast of NT$452.

Laser Tek Taiwan Co., a maker of electronic power regulators, climbed NT$1.05, or 2.2 percent, to NT$49.1. "Oil money" from the Middle East may acquire 50 percent of Laser Tek Taiwan Co., the Economic Daily News reported yesterday. Laser Tek isn't aware of the purchase plan, the newspaper said.