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Bourse falls, led by 'Apple concept stocks'

TAIPEI -- Shares on the Taiwan Stock Exchange lost ground yesterday as selling focused on local suppliers to Apple Inc. after it was reported that the U.S. electronics giant had cut back orders for its iPhone 5 panels, dealers said.

The weakness of the so-call Apple concept stocks also drove investors to dump other large-cap electronics stocks amid concerns over a rising New Taiwan dollar, which could affect the high-tech sector's profitability, dealers said.

The weighted index closed down 58.95 points, or 0.75 percent, at 7,765.02, after moving between 7,744.39 and 7,823.51, on turnover of NT$91.39 billion.

The market opened down 0.46 points and selling in the electronics sector escalated as investors took cues from a decline of the tech-rich NASDAQ index on Wall Street caused by a 3.6-percent dive in Apple shares, dealers said.

Local Apple suppliers, in particular Hon Hai Industry Co. which assembles iPad and iPhone, faced heavy downward pressure after Japan's Nikkei said Apple had halved its orders for screens for its latest smartphone model in the current quarter, dealers said.

However, after the index fell closer to 7,700 points, some bargain hunting emerged, helping to prop up the market well above that level by the end of the session, dealers added.

“Market sentiment toward the high-tech sector was hurt by the Nikkei report,” Mega International Investment Service Corp. analyst Alex Huang said. “Many investors appeared wary of iPhone sales as optimism toward the gadget was wiped out.”

Hon Hai Precision, which generates about 40 percent of its contract manufacturing services from Apple, closed down 3.44 percent at NT$84.20, with 106.98 million shares changing hands.

Among other local suppliers to Apple, metal casing maker Foxconn Technology Co. fell 3.16 percent to end at NT$85.80 and its rival Catcher Technology Co. lost 3.38 percent to close at NT$128.50. Smartphone camera lens manufacturer Genius Electronic Optical Co. shed 2.18 percent to end at NT$201.50.

Selling also spread to other electronics stocks amid concerns over the strength of the New Taiwan dollar, with Taiwan Semiconductor Manufacturing Co. (TSMC) down 1.47 percent at NT$100.50 and personal computer vendor Austek Computer Inc. dropping 1.20 percent to NT$329.00.

“Investors had better keep a close eye on the fourth quarter reports by Wall Street heavyweights, including Intel Corp., as this could impact the global financial markets in the short term,” Huang said.

“TSMC, the world's largest contract chip maker, is scheduled to release its fourth quarter earnings report Thursday, which is also worth watching,” he said.

The construction sector suffered the heaviest selling among the eight major sectors of the market, finishing down 1.1 percent. Textiles, and machinery and electronics stocks fell 0.9 percent, and paper and pulp stocks shed 0.8 percent.

The cement, foodstuff and financial sectors each lost 0.7 percent, while plastics and chemicals closed unchanged.

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